A "trust-based" estate plan may be the best option to provide for you family's needs over an estate plan that utilizes a will. However, there are certain things trusts can and can't do, just like there are certain things wills can and can't do. Also, what if all of your money and property isn't held in your trust? What happens then?
Because of this fact, generally trust-based estate plans also include a will that we call a "pour-over will". Your trust is still the star of the show in regards to control, but a will is put in place to address the important items your trust cannot and to catch everything that is not in trust when you pass. Essentially, the will pours everything into your trust so that it can then be administered as desired in that vehicle.
Having both a trust and pour-over will covers the important areas of each document and makes for a strong estate plan. One without the other can lead to serious headaches for your heirs, increased settlement costs, and missed opportunity for your plan to fulfill your wishes and to provide for the best possible situation.
We'd love to hear from you and provide more information on estate planning documents, discuss how they should fit into your financial plan, and help you locate and work with a qualified attorney.
Mychal Eagleson, CFP®, AAMS® is the President of An Exceptional Life Financial, a firm that specializes in financial planning for teachers and families with special needs. He frequently writes and speaks on personal finance topics relating to these clients. Mychal also serves on the board of the Financial Planning Association of Greater Indiana as the Director of Public Relations & Social Media. To read more of his articles or learn about An Exceptional Life Financial please visit: www.anexceptionallifefinancial.com.