Estate Planning - One Size Does Not Fit All

Estate planning allows you to control how and to whom your property passes when you die. Depending on your particular situation, one estate planning strategy may provide a better fit than others. Below are the basics of three (3) strategies to consider:

Last Will and Testament Plan

A Last Will and Testament is a legal document in which you direct how assets will be distributed at your death. You also appoint your Personal Representative (the same as Executor) in your Will, and this person administers your estate when you die. 

A Will controls the transfer of “probate assets.” Simply put, probate assets are property you own in your sole name (not joint with anyone else) and which do not have a beneficiary or TOD designation (see below). With a Will plan, generally your Personal Representative will work with an attorney to file your Will after your death with the local court. This process is called “probate,” and it is required to give the Personal Representative legal authority to act. Wills are a familiar concept to most people and generally easy to understand and implement.   

Revocable Trust Plan

The primary goal of a Revocable Trust plan is to avoid the probate process required with a Will plan. You create the Trust during your lifetime by signing a Trust Agreement. You serve as both Trustee and beneficiary during your lifetime. Importantly, you add assets to the Trust during your life so that the Trust owns the property. For example, John Smith would sign a deed transferring his house to John Smith, Trustee of the John Smith Revocable Trust. If done correctly, a Trust plan can avoid the need for probate and provide privacy. 

You name a Successor Trustee to manage the trust if you become incapacitated and after your death. Your Trust Agreement outlines, among other things, to whom the trust assets pass after your death. You will also sign a Will as a “safety net” – it simply adds any probate assets you may own at your death to your Trust so that they can be distributed to the persons named in the Trust. 

Transfer on Death (TOD) Plan

Indiana’s Transfer on Death Property Act allows you to sign a document that transfers ownership of certain property to another person or multiple people at your death. TOD plans can be efficient and economical. However, if all assets are set up to transfer on death to others, there may be no funds available to pay final expenses. People who use a TOD plan should review any TOD instruments regularly to ensure the plan is consistent with their wishes. 

In sum, many strategies are available to transfer assets at death. You may decide that one of these strategies, or a combination of them, best suits your needs. We encourage you to discuss options with your attorney and to remember that one size does not fit all.