Category: Wills

Do I Need a Will or a Trust?

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Yes, everyone needs a will, a trust, or both. These important tools ensure that your legacy will be carried out according to your wishes and allow you to provide for loved ones after your passing. A properly prepared trust can also help avoid probate, which is a lengthy, public, and often expensive court process that becomes necessary when there is no legally valid estate plan in place for distributing your accounts and property after your death. Wills and trusts are not just for the wealthy: People with any level of means can benefit from having a clear plan in place to protect their loved ones, avoid unnecessary legal hurdles, and ensure that their wishes are honored. Even if your savings are modest or your property has mostly sentimental value, these planning tools provide peace of mind and control over what happens after you are gone.

Creating a will or a trust should be a priority for several important reasons, including the following:

Handling Digital Accounts

Almost everyone has at least one account or digital presence online. Think about all your photos stored in the cloud, as well as your emails, social media profiles, online shopping accounts, online payment platforms (e.g., Venmo or PayPal), and online banking accounts. Whom do you want to have access to them? Do you want the accounts deleted or transferred to someone else? What happens if the account holds money? How do your loved ones access that money? An estate plan ensures that your online photos, records, and accounts do not get lost or locked. 

Avoiding State Recovery for Medicaid Benefits

Nursing homes can cost thousands of dollars per month. Medicaid is a cost-sharing government program that supplements the costs of a person’s long-term care so long as they meet certain asset and income requirements. However, the state Medicaid agency might try—and is legally allowed—to recoup the money spent on your care from certain accounts and property you own at the time of your death. A comprehensive estate plan may be able to prevent or limit the state from recovering these costs from your bank accounts or, under certain circumstances and only in some states, forcing your loved ones to sell your family home to pay back your nursing home care costs. 

Reducing Income Tax Concerns with Retirement Accounts

An inherited retirement account is not always tax-free (depending on the type of account). While an estate or inheritance tax may not apply, the beneficiary may have to pay income tax based on the amount they received and their current income tax bracket. Including your retirement accounts in a proactive estate plan can help protect your nest egg and possibly limit your beneficiaries’ income tax burden when they inherit these accounts.

Maintaining Control of Your Legacy and Protecting Beneficiaries

Estate planning can help ensure that your money and property are distributed in accordance with your wishes after your death. For example, if you want to provide not only for your surviving spouse but also for your children from a prior relationship, your estate plan can help you do that. It can also protect your beneficiaries’ inheritances from claims by divorcing spouses or creditors, pending lawsuits, or exposure to financial predators. With a plan, your money and property are also less likely to be lost to your beneficiaries’ mismanagement or frivolous spending—a surprisingly common outcome when no safeguards are in place. In fact, studies show that 70 percent of family wealth is depleted within the two following generations and 90 percent within three generations.1 With thoughtful planning, you can avoid becoming part of that statistic.

An estate plan can also help ensure that your values are passed on to the next generation and that your wishes are legally documented in a way that everyone understands. Discussing your wishes with your loved ones will not make your plan for the future legally enforceable. The only way to ensure that your goals are carried out is to work with an experienced estate planning attorney to create a will or a trust. Do not put off this important step. Taking the time to plan will save your loved ones stress, money, and heartache in the future. It is truly a gift to them.

  1. How real is the third-generation curse, and how can financial advisors tackle it? CFA Institute (Feb. 6, 2025), https://www.cfainstitute.org/insights/articles/third-generation-wealth-curse-advisor-solutions. ↩︎

If I Give My Home to My Child in My Will, Can They Take My Home While I Am Still Alive?

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The short answer to this question is no. Naming your child as the recipient of your home in your will does not give them any right to your home while you are still living. However, understanding why that is the correct answer requires a little more explanation.

Title Is Key

When it comes to real property such as a house, the person who has title to (or legal ownership of) the property controls the property. The title holder (owner) can lease, mortgage, refinance, sell, gift, or do anything else with the property. When you purchased your home, you received title to it through a deed. This deed proves you are the owner and you have all rights to your property.

A Will Is Effective Only upon Your Death

A will is a legal document that specifies what happens to your property upon your death. The key phrase here is “upon your death.” A will has no real legal significance until the time of your death. A will does not change title (ownership) to property during your life, so naming your child in your will as the recipient of your home means that they have no ownership rights to your home until after your death. Also, you can rewrite or change a will at any time during your life while you are still mentally able to do so. For these reasons, your child cannot take your home while you are still alive.

A Word of Caution

Using a will to give your house to your child at your death guarantees that they will have to go through the probate process to complete the title transfer. In an effort to avoid probate, some people will put their child’s name on the deed to their home while they are living, with the intent of continuing to own the home while they are alive and passing the home to their child at the time of their death. As discussed above, title to property is received through a deed. If you put your child’s name on the deed to your home, they immediately become a co-owner. As a co-owner, they can do what any owner of property has the right to do: lease, mortgage, refinance, etc. So while naming your child in your will as the recipient of your home at your death does not give them the ability to take your home while you are still alive, putting your child’s name on the deed to your home would indeed give them–and their creditors–that ability.

If you want to ensure that you maintain control of your home while you are alive, that your child receives your home upon your death, and that they can avoid the probate process, there are estate planning tools such as a transfer-on-death deed or a revocable living trust that can accomplish all of these goals. We are happy to meet with you to discuss your unique goals and how a tailored estate plan can help you meet them.