You might be asking, “What is the best type of estate plan?”  A Will or a Living Trust?  The most appropriate answer is "it depends".

 

There are four typical types of estate plans.  The first is the government's plan.  If you don't plan, the government has a default plan for you.  The state determines who receives your property, who will be your executor, and the court process that your heirs will go through upon your disability and death.

The second type of estate plan is a plan that uses beneficiary designations to transfer assets following your death. Putting beneficiary designations on your assets will direct those assets to your heirs after death.  Unfortunately, some assets do not allow for beneficiary designations. Keep in mind, your beneficiary designations override any instructions you leave in a Will or Living Trust, and don't help upon disability.

The third type of estate plan is a plan that is designed to use the probate process.  These plans use a Will to provide the instructions for the division of property.  Many plans unintentionally end up in the probate process, but some are designed to use the probate process to establish protections for minor or disabled beneficiaries.

The fourth type of estate plan is a properly implemented Living Trust plan.  This type of plan is designed to avoid the probate process and allow your estate to be administered in a private manner without court involvement. It is often also used to provide protections for a surviving spouse, children, or other heirs after your death.

You should consider when, how, and what you want to leave your heirs; the time, effort, and resources you are willing to devote to your plan during your life, and the benefits and shortcomings of each type of plan.  Then, with the advice of a quality estate planning attorney, you can choose which of the four types of plans will work best for you.

If you would like to learn more about your estate planning options, visit www.EstatePlansThatWork.com to sign up for a complimentary educational workshop.