SimplyTrust Knowledge Base

A: A quick overview of wills: a will—officially known as a last will and testament—is a legal document that specifies how to distribute your assets after you pass away. It also lets you name guardians for minor children and specify other important wishes, such as funeral arrangements. Without a will, state laws dictate how to divide your estate, which may not match your intentions.

A: Advance health care directives are legal documents that specify your medical treatment preferences and names someone to make healthcare decisions for you if necessary. It ensures that doctors and loved ones follow your wishes, even if you can’t express them due to illness or injury.

A: 1. Primary Purpose: A will distributes assets directly to beneficiaries, while a pour-over will moves remaining assets into a trust.2. Probate Process: A will always requires probate, while a pour-over will may still require probate for untitled assets.3. Trust Requirement: A traditional will stands alone, whereas a pour-over will functions with a living trust.4. Privacy: A will becomes public during probate, but a pour-over will keeps most assets private through the trust.5. Best For: A traditional will works for individuals without a trust, while a pour-over will suits those using a trust to manage assets.

A: People avoid estate planning for loads of reasons (bad ones). Some people feel like they're too young or don't own enough or they can just do it later. Others find it to be an unpleasant experience (although it doesn't have to be). Some think it's too complicated, time-consuming and expensive (although, again, it doesn't have to be). And still others figure their family will handle it and that it'll all work out.

A: Life is always changing, and a trust should change with it. Regular updates ensure an estate plan reflects your wishes, protects your loved ones, and makes things as smooth as possible for everyone involved. It's important to update trusts. And keep updating them.Major events like getting married (or divorced) or having a baby happen. Finances can go up (e.g., new job) or down (e.g., lost job). Assets change (e.g., buying a house or selling a house). Families and relationships change (e.g., marriage, divorce, birth, death). And sometimes it's just sensible to make legal or strategic decisions.

A: A pour-over will is a special type of will that works hand in hand with a living trust. Its main function is to ensure that any assets not already in your trust automatically transfer (or “pour over”) into the trust.Essentially, it acts as a safety net. If certain assets aren’t already in your trust, the pour-over will direct them there. This way, your estate plan remains intact, and your assets are ultimately distributed according to the terms of your trust.

A: Getting a trust isn’t just for the ultra-rich or paranoid—it’s a smart, strategic move that protects your assets, your privacy, and your loved ones. Whether you’re looking to avoid probate, minimize taxes, or make sure your 20-year-old doesn’t spend their inheritance on an ill-advised TikTok stunt, getting a trust is the way to go.

A: A trustee is a person or entity legally responsible for managing the assets held in a trust. Their duty is to act in the best interests of the beneficiaries, ensuring the trust operates according to the grantor’s intentions. Trustees can be individuals, such as family members or close friends, or institutions like banks and trust companies. Core responsibilities:Managing Trust Assets – Trustees oversee and manage financial assets, real estate, or business interests within the trust. (Read about trusts for small business.)Fiduciary Duty – They must always act in the best interest of the beneficiaries, making ethical and prudent decisions.Distributing Assets – Trustees distribute trust funds according to the terms outlined in the trust document.Record-Keeping and Reporting – Detailed documentation of transactions and annual reports may be required, especially for irrevocable trusts.Legal and Tax Compliance – Trustees must ensure compliance with applicable laws and proper tax filing.Conflict Resolution – They often mediate disputes between beneficiaries or between beneficiaries and the trust itself.

A: Protecting beneficiaries (from themselves) isn’t about withholding wealth. It’s about ensuring that their inheritance provides lasting financial security. By tailoring an estate plan to your beneficiary’s specific needs. A number of vehicles can do this:1. Trusts.2. Staggered distributions.3. Incentive-based distributions.4. Guardians and conservators.5. Financial education resources.6. Protections against predators.7. Special needs trusts for disabled beneficiaries.

A: A 529 plan is a tax-advantaged savings plan designed specifically for education expenses. These plans are typically offered by states and have certain restrictions but come with significant tax benefits. (Here's more about 529 plans from the horse's mouth: the IRS.)

A: The most notable difference between individual trusts and joint trusts lies in ownership. Individual trusts are highly customizable and independent because the trustor doesn’t have to consult with anyone else on decisions. However, this can lead to a more fragmented estate plan for couples who manage their assets separately. In contrast, joint trusts involve shared ownership, meaning that decisions about assets and beneficiaries require mutual agreement. This reduced individual control can often mean greater difficulty during divorce or disputes. However, joint trusts offer simplicity by consolidating assets into one legal entity.

A: Well, because your estate probably includes a lot more things than you realize. It's not just obvious things of value like your home, car, and savings. It's also less obvious things like sentimental items (e.g., family heirlooms), digital assets (e.g., social media accounts) and pets (yes, pets!).

A: The presence of witnesses in trusts and wills plays a vital role in safeguarding these documents against challenges. Whether ensuring compliance with legal requirements or providing crucial testimony during disputes, witnesses contribute to the reliability and integrity of estate planning documents.

A: It depends. Revocable trusts are better for those seeking flexibility and control. They are ideal for avoiding probate, managing assets during a grantor’s lifetime, and adapting to changes in family or financial circumstances. Irrevocable trusts, on the other hand, are better for those who prioritize asset protection and tax savings. They are particularly useful for shielding assets from creditors and reducing the taxable value of an estate, making them a preferred option for high-net-worth individuals or those with significant financial concerns.

A: At its core, probate is the legal process of sorting out someone’s estate. Imagine someone left behind a to-do list, but it’s written in legalese. Probate is the process of checking all the boxes—validating a will, paying off debts, and making sure the remaining assets go to the right people. In short, it’s how the court ensures everything goes according to someone’s wishes.

A: 1. Not having an estate plan.2. Start estate planning late.3. Not regularly updating estate plans.4. Overlooking digital assets.5. Ignoring health directives.6. Choosing the wrong executor.7. Forgetting to name guardians for minor children.8. Not planning for estate taxes.9. Leaving beneficiary designations outdated.10. Overcomplicating or oversimplifying trusts.11. Forgetting about contingent beneficiaries.12. Assuming a will avoid probate.13. Overlooking funeral instructions.14. Failing to include charitable giving.15. Not protecting loved ones with special needs.16. Skipping an asset inventory.17. Forgetting about business succession.18. Not funding a trust.19. Failing to communicate the plan.20. Not reviewing the plan periodically.

A: A trustee is the person (or organization) responsible for managing a trust and carrying out its terms. Think of them as the trust’s manager or caretaker. Their job is to oversee the assets, ensure their proper use, and follow the instructions laid out by the person who created the trust (known as the grantor). (By the way, their job differs for simple trusts and complex trusts.)Whether the trust is set up to provide for family members, support a charitable cause, or even care for a beloved pet, the trustee is the one making sure everything goes according to plan.