Last Will and Testament
Regardless if you choose to include a trust in your estate plan, a last will and testament is part of every estate plan. A last will and testament is used to:
- Assign personal representatives/executors to manage your estate upon your passing
- Name beneficiaries of your assets estate that do not already have beneficiary designations
- Nominate guardians for dependent children
- Create a testamentary trust to control when and how assets are distributed
- Waive the potential need for a probate bond
If you pass away without a will (intestate), the state of Arizona has a will for you. A spouse and children will typically inherit your estate, followed by the next closest relatives.
If you create a living trust, your last will and testament is called a pour over will and is used to both handle assets left outside your trust and name guardians for dependent children.
Executors / Personal Representatives
The people you name in this role will be responsible to a variety of tasks not limited to filing your will and appropriate documents with the probate court, selling assets, settling debts, paying taxes and distributing your estate.
If both parents of a dependent child are deceased or for some reason unable to act, a new legal guardian must be named until the child becomes an adult. With proper estate planning, the role of raising your child can be separated from the role of managing your child's estate. There may be advantages and disadvantages to separating these powers.
Read more about choosing guardians for children
Instead of being created prior to the creators passing like a living trust, a testament trust i
s created after the creator passes according to instructions left in the last will and testament. A will can create multiple testamentary trusts if needed.
The reasons for creating a testamentary trust are similar to those for creating a living trust:
- Controlling when and how young beneficiaries receive their inheritance
- Creating a life estate for a beneficiary to use a home or other asset before it is distributed to someone else
Benefits of a testamentary trust include the lower cost upfront to create the documents and controlling distributions.
Disadvantages of a testamentary trust include the trustee may be required to meet with the probate court on a regular basis.
Probate is NOT avoided using a testamentary trust. If avoiding probate is concern, a living trust may be the better option.
Recommended Pages to Read Next
Guardians for Children