You might be asking, “What is the best tool to use to plan your estate?”Should you use a Will, beneficiary designations, or maybe a trust?The most appropriate answer is “it depends.” They are all tools that accomplish different things.

There are five typical tools used in estate plans. The first is the probate code (government’s plan). If you don’t plan, the government has a default tool for you. The state determines who receives your property, who will be your executor, and the court process (probate) that your heirs will go through upon your disability and death.

The second type of tool used in estate plans is beneficiary designations used to transfer assets upon death. Using beneficiary designations will direct your assets to your heirs after your death. Unfortunately, some assets do not allow for beneficiary designations. They also don’t provide for contingencies and don’t protect assets. Keep in mind, your beneficiary designations override any instructions you leave in a Will or trust, and don’t help upon disability.

The third type of tool is a Will. All Wills require the probate process to accomplish your objectives. A Will provides instructions for the division of property among your heirs upon death. Wills also can provide contingencies and can protect assets.

The fourth tool is a revocable trust which is designed to avoid the probate process and is administered in a private manner without court involvement. It addresses disability issues and directs assets to your heirs after your death. It can provide for contingencies and provide protections for assets, a surviving spouse, children, or other heirs after your death.

The fifth type of tool is an asset protection trust. This tool is designed to protect assets from Medicaid spenddown. If you need nursing home care, the government will not help pay for your care until you have spent most of your own assets.

Tune in to next month’s Brighton Buzz for Part 2 and additional discussion of the benefits and shortcomings of each type of planning tool. If you have questions about these issues, you are encouraged to gain more knowledge about available estate planning options, by visiting www.EstatePlansThatWork.com to sign up for a complimentary educational workshop.