How to Prepare Trusts and Wills

By Eric Tess

Lawyers and financial advisors recommend writing wills to ensure your wishes for transferring assets are followed in your absence. Also, wills and trusts eliminate conflict and lengthy legal proceedings over the distribution of your wealth. 

Unfortunately, many of us don’t have wills. A Gallup study reveals that only 45% of adult Americans have living wills. But if you die without writing a will or trust, your family members may have a difficult time settling your affairs and determining asset allocation. 

Perhaps people haven’t realized the importance of preparing trusts and wills, procrastinate, or just don’t know how to prepare these important documents. Here’s an extensive guide on how to prepare trusts and wills.

Who Needs Wills & Trusts?

There’s a widespread belief that wills and trusts are for the wealthy and elderly. Perhaps, this is why so many people don’t have them yet — they’re waiting to get old or wealthy. However, you can have a will if any of the descriptions below fit you:

  • You’re an adult — over 18 years
  • You own a home or property
  • You have savings or investments
  • You have a career
  • You have children or other dependents

If the above factors describe you and you don’t have a will, you need to write one now. Otherwise the courts will decide about your interests after you die. But don’t worry — we’ve got some tips to help you.

How to Write a Will

A will ensures that your final wishes are respected. The most obvious way to write a will is to visit an attorney. However, there are other options, like writing it all by yourself. Whichever option you choose, here’s how to draft your will. 

1. Decide how you want to write your will

Do you want to write it all by yourself, or do you need an attorney's expertise? You’re free to decide how you want to draft your will. Here are 4 ways to write your will according to Forbes experts:

Use an in-person paid service (attorney or lawyer)

This is the traditional and recommended route for writing wills, and for a good reason! You have a professional assisting you closely and offering a high level of reassurance that you can’t get elsewhere. However, this is an expensive and time-consuming process. Moreover, you want to find a professional that you trust.

Use an online paid service

There are many online service providers ready to help you write your will. However, you should read customer reviews before committing to one.

Buy a DIY kit or template

You can use a DIY will template online or in some brick-and-mortar stores. The kits have guidelines, templates, and examples to help you draft and legally validate your will. However, these only apply to generic wills.

Write Your Own

If you are familiar with the law, you can quickly write your own will. Go over your country’s or state’s legal requirements for will writing.

Handwritten wills are also referred to as holographic wills. Unfortunately, these wills don’t work in all states, and the courts can rule them invalid. We, therefore, don’t recommend holographic wills.

2. Lay out your assets (and think about your last wishes)

It's a good idea to gather a list of all your assets and think about your final wishes. Your assets may include:

  • Real estate or property
  • Cash savings or checking accounts
  • Intellectual property, like copyrights, patents, and royalties
  • Intangible personal property, including businesses, bonds, and stocks
  • Other valuables, like cars, collectibles, artwork, and family heirlooms

You may also consider your digital assets, including social media accounts, email addresses, online bank accounts, photo sites, and more. Once you have a list, make your intentions about who should receive your assets detailed and precise. 

RELATED CONTENT: What to Know about an Advanced Directive

3. Get the necessary documents needed for will preparation

Before you begin preparing your will, get all the necessary documents needed to prepare or execute. Some of the documents will confirm ownership of your assets and properties. They include:

  • Deed(s) to property
  • Marriage/divorce licenses and certificates
  • Insurance policy information
  • Mortgage information
  • Investment portfolio
  • List of all your bank accounts 
  • Names, emails, addresses, and phone numbers for your lawyers, banker, financial advisor, insurance agent, and any other party of interest

4. Choose your beneficiaries and executor

Beneficiaries are the people who’ll gain from your will. They may be your children, spouse, parents, or friends. 

Some people choose to donate all or part of their property to non-profit and charitable organizations. Your beneficiaries designations will inherit your properties and your belongings as expressed in your will. 

When choosing beneficiaries for your will, be specific about “who” will inherit “what.” Additionally, if there’s someone you don’t want to benefit from your property when you die, be sure to name them too.

Once you’ve allocated your property to your beneficiaries, pick an executor, someone who’ll ensure that your property is distributed according to your wishes. Choose someone trustworthy who can handle all the legal, financial, and moral obligations. You may also want to identify a co-executor.

5. Name a guardian

If you have minor children who haven’t attained the legal age or who may have special needs and require care past the legal age, nominate a guardian. The named guardian takes full physical and legal custody of your minors after you die. While guardianship typically passes down to any surviving parent, you may want to name someone else if the surviving parent is incompetent. 

Set of hands offering a pen to another set of hands

6. Sign your will

When all your wishes are finally on paper, proceed to sign your will. However, check your state’s requirements before signing. Some jurisdictions specify the number and identity of witnesses. Ideally, have at least two witnesses. 

Note: A will is not legally valid until signed before witnesses. Also, witnesses are not supposed to be beneficiaries of your will.

7. Store your will

Find a secure place to store your will and ensure your executor knows where to find a copy. For example, you can keep your estate planning documents in a safety deposit box, a fireproof safe, or a legacy drawer. You can also store or even have your will executed electronically. 

8. Review and update your will

Chances are, you will not immediately after preparing your will. Therefore, you may need to update or amend your will based on significant life changes or after a specific period.

Ideally, review and update your will after every 5 years. However, major life changes can trigger a review of your will before the five years. Some events that warrant a review of your will include:

  • Marriage/remarriage
  • Divorce
  • Birthing/adopting children
  • Purchase/sale of a major asset/property
  • Death of a beneficiary or executor

RELATED CONTENT: When & Why to Consider Power of Attorney

How to Write & Prepare a Trust

Setting a trust allows you to manage your property and assets throughout your life and after your death. A trust transfers assets from the owner (known as the grantor/trustor) to a trustee.

While wills only take effect when you die, trusts are effective once you transfer your assets to the trustee. Before writing your trusts, it’s important to understand the various types.

  • Living trust/ inter vivos trust: Refers to a type of trust prepared while the grantor is still alive.
  • Revocable trust: Refers to a living trust that you can cancel or change at any time.
  • Testamentary trust: Set up by the grantor’s final will and testament.
  • Spendthrift trusts: Trusts meant for beneficiaries that can’t make sound financial decisions. In this case, the trustee decides how the heir(s) spend money.

Now that you understand the different types of trusts, follow these steps to prepare your trust:

1. Identify and decide the assets to place in your trust

List all your properties and decide which ones you want to include in your trust. They could be investments, real estate, bonds, or businesses.

2. Identify beneficiaries

Decide and list down all the beneficiaries of your trust. They may include your spouse, children, friends, parents, grandchildren, and even charities.

3. Find all the paperwork

Get all documents attached to your assets and properties, including title deeds, insurance policies, and stock certificates.

4. Select your trustee(s)

This is an essential part of preparing your trust. You can choose a family or friend to manage your assets and property. However, we recommend selecting an unbiased third party, like your lawyer, who is not tied to your family dynamics. This ensures that your trust is executed in accordance with your wishes. 

Additionally, you want a professional with experience dealing with potential issues that could arise during the implementation of the trust.

5. Draft the trust document

Ensure you create your trust agreement with the help of an experienced attorney. Of course, your trustee will be present to sign the agreements and accept the transfer of assets and property. 

Final Thoughts

It is believed that trusts and wills are for the wealthy and elderly. However, everyone can write a will or create a trust to express their last wishes. If you have any property, children, savings, or investments, it's crucial to prepare a will while you’re still alive. This makes it easier for your beneficiaries to inherit your property per your wishes without any challenges or battles.

The process of preparing wills and trusts is almost similar. When preparing a will or trust, we recommend enlisting the help of experienced attorneys.

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Tags: Legal Tips