It is definitely true that wills are the cornerstone of the estate planning process. However, they are also subject to probate, which can be problematic if your will is contested by family members.
To ensure your estate is properly protected, you may also need to create a trust. Despite popular opinion, trusts are not only useful to the ultra-wealthy. They can also benefit people like you by helping you distribute your assets in the manner you see fit. Forbes explains why trusts make such a great addition to the estate planning process.
How probate works
During probate, the court reviews your will and distributes assets to your heirs. Certain assets are not subject to probate. For example, if you have a life insurance policy with named beneficiaries, proceeds will pass directly to your heirs without being subject to probate. Any jointly-owned assets are also immune.
Wills can be contested for numerous reasons. An heir may claim that your will was created improperly, or that you were pressured into making certain decisions. There may also be claims of a more recent version with different terms. If the court decides these claims are valid, they will disperse assets according to their discretion.
How a revocable living trust can help
Assets placed in a revocable living trust are also not subject to probate. They also provide you greater control over the way your assets are distributed. With a will, you can only name the asset and the heir, but a trust allows you to create terms and conditions on how assets are distributed. For example, you can stipulate that an heir receives their inheritance in staggered amounts, such as providing half at one age and the rest at another age.
You can also place conditions on inheritances. You may stipulate that an heir will only receive your assets if they complete college first. Not only does this ensure your assets are handled the way you want, it also benefits your heir when it comes to financial responsibility.