A will or sometimes called a testamentary will or last will and testament is a legal document that states how you want your assets distributed and your affairs taken care of when you die. In most States, if you don’t have a will then State law will determine how your assets get distributed.
A will should also include guardianship provisions if you have minor children or they will become wards of the State until a probate court can appoint a guardian (who may not be the person you would have selected.)
A will can give certain limited guidance as to how you would like your heirs to use what you have left for them and a will allows you to disinherit a spouse or child or disproportionately allocate assets among heirs. (State community property or common laws may also impact whether or not you can disinherit a spouse.) A designated executor will oversee the will provisions.
While the movies teach you that a napkin will is okay, a will should really be drafted with the help of an attorney.
Any assets left to an heir must go through probate court which will make sure that creditors are taken care of and your heirs receive their portions. This makes your estate public record and may be costly dealing with court and attorney fees. (California and Wisconsin allow executors to represent themselves. Other States require probate attorneys.) Probate can take a year or more to resolve and can be expensive.
We have already discussed what a trust is in an earlier section.
Oftentimes a will is used to create a trust(s) that will be used instead of the probate process to distribute assets to heirs/beneficiaries. These are called living trusts and are revocable until death of the trustor. Your estate remains private and the trustee selected then carries out the provisions of the trust.
In fairness, trusts are generally more expensive to create and maintain than a will is but do avoid the probate process, fees and timelines. Trusts also allow you to provide more direction in distributions and conditions than a will allows.