There are different estate planning tools available. The table below provides a clear summary of how each tool compares with others. Consult with your estate planning lawyer for more information. Scroll down for the definitions of the terms used on this table.
|Benefit of Planning Tool||No|
|Allows you to select the beneficiaries of your estate||No||Yes||Yes||Yes||Yes||Yes|
|Allows you to select the executor of your will||No||Yes||Yes||Yes||Yes||Yes|
|Allows you to select the trustees of your trust||No||No||Yes||Yes||Yes||Yes|
|Allows you to select the guardians for your children||No||Yes||Yes||Yes||Yes||Yes|
|Avoids the time-consuming and expensive probate process||No||No||No||Yes||Yes||Yes|
|Timing of Distributions|
|Permits distribution of assets to children other than simply upon reaching the age of majority (Ex. 1/3 at age 25, 1/3 at age 30, 1/3 at age 35)||No||No||Yes||Yes||Yes||Yes|
|Prevents conservatorship of estate owner||No||No||No||Yes||Yes||Yes|
|Protects assets from creditors||No||No||No||Yes||Yes||Yes|
|Assists married couples in reducing estate taxes||No||No||Possibly, if properly designed to save estate taxes||No||Yes||Yes|
|Allows the first spouse to die to name the ultimate beneficiaries of his/her estate while still permitting the surviving spouse to utilize the assets while still deferring estate taxes||No||No||Yes||No||No||Yes|
No Will — you have no will, and your estate passes to your heirs based on the laws of your state on intestate succession, or descent and distribution.
Basic Will — you have a will that distributes everything to your spouse, if living, otherwise to your children when they reach the age of majority.
Pour-over Will — you have a will that distributes everything to a trust.
Living Trust — a trust designed to avoid probate and provide asset management. Take note that each person is entitled to have the first $675,000 of his or her estate pass to his or her heirs without estate taxes, referred to as the unified credit. A basic living trust does not effectively use the $675,000 unified credits of both spouses. Because of this deficiency in a basic living trust, an AB Trust is often recommended to married couples with substantial assets.
AB Trust — a trust designed to make sure the $675,000 unified credit of each spouse is used to the full extent possible, while allowing the surviving spouse to make use of the assets of the deceased spouse during the remainder of the surviving spouse’s life.
QTIP Trust — a trust designed to permit a spouse to transfer assets to their trust while still maintaining control over the ultimate disposition of those assets upon the spouse’s death. QTIP Trusts are recommended in situations where a person gets married for at least a second time but has children from a previous marriage for whom they want to reserve assets.