We all will die sometime. If we care about the survivors, we need to have a will.
Some folks will have a trust in addition to the will. The will usually will say something like, “If there are any assets (items of value) that are not titled (governed) by the trust or otherwise, put those assets into the trust.”
If something is titled JTWROS (Joint Tenants With Right of Survivorship), the surviving joint tenant inherits, whether there is a trust or a will or not. That title holding is fairly common for a lot of homes, vehicles, bank accounts and even broker accounts.
If there is a beneficiary designation, the indicated beneficiary inherits, whether there is a trust or a will or not. That is common for life insurance, IRAs, annuities and any other items that have a beneficiary designation.
By the way, it is important to verify the custodian has the beneficiary designations you want in their files. A copy of those might be kept with your other estate planning documents.
A few years ago, it was common to use a trust to reduce or avoid death taxes at the second death of a couple. Now a single person can die and leave behind $5.43 million with no death tax. The use of trusts to save death tax is greatly reduced. Trusts still avoid probate (court supervision) and that is important to some folks.
The Durable Power of Attorney forms for health care and for financial matters are also important. The will has no authority or power until death. In the meantime, it is possible a person needs an agent to talk with doctors, make decisions, pay bills, etc.
The Power of Attorney forms need to be correctly. We urge clients to see an attorney for all legal documents preparation.
Recently, a 48 year old man had an accident and died. He did not have a will. His family will find a way to get things done, but it would have been better if he had a will and had left instructions and suggestions on what to do with the business. He did have some life insurance and that will be a big help for his wife and children.
If you know of someone that does not have a will and does not have the Power of Attorney forms, please help them understand how important it is to see an attorney and get the forms prepared and properly signed and witnessed.
Did you hear? “A mountain is composed of tiny grains of earth. The ocean is made up of tiny drops of water. Even so, life is but an endless series of little details, actions, speeches and thoughts ... and the consequences, whether good or bad or even the least of them, are far reaching.” — Sivananda Saraswati.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.