A will lets you specify how your estate will be distributed on your death. Without a will, the state will distribute your estate based on current law. A will also allows you to name a personal representative to administer your estate to your specifications. An estate of this size maybe subject to substantial federal estate and income taxes. To bypass much of the potential tax burden, a trust may be appropriate. A trust is also appropriate when there are concerned that a beneficiary may not be able to manage a lump-sum inheritance due to age or capacity. In that case, a trust can be used to govern exactly how and when your assets are to be distributed.
Estate planning is an on-going process. It is extremely important to have your will periodically updated. A will should be reviewed:
- At the birth, adoption, or death of a child.
- If anyone named in the will marries, divorces, or separates.
- When major tax laws change.
- When you move to a new state.
- When there is a significant change in income or wealth for you or your beneficiaries.
- When there is a major change in the needs, circumstances, or objectives for you or your beneficiaries.
