Estate planning & legacy building
Helping you protect what matters most
What is estate planning?
Estate planning involves creating legal documents that outline your wishes for how your assets should be handled. These documents may include a will, a trust, powers of attorney and healthcare directives. Each serves a specific purpose, and together they help ensure that your intentions are carried out and that your loved ones are supported.
Understanding wills
A will is a legal document that provides instructions for how your assets should be distributed after your death. It can also name guardians for minor children. However, a will does not grant immediate access to your assets. It must be submitted to a court and go through a process called probate. Probate can be time-consuming, may involve legal fees, and is a matter of public record. Many people are surprised to learn that a will alone does not avoid these challenges.
Understanding Trusts
A trust is a legal arrangement that allows you to transfer ownership of your assets to a separate entity, which is managed according to your instructions. Trusts can be used to avoid probate, maintain privacy and provide more control over how and when assets are distributed. Trusts are especially useful for individuals who want to ensure a smooth transition of assets and reduce the burden on their loved ones.
Trusts
What is a Trust acccount?
A trust account is a financial account opened in the name of a legal trust. It’s different from the trust document itself, which outlines how your assets should be managed and distributed. The trust account is where those assets are held and accessed. After a trust is created with an attorney, it must be funded. This means transferring ownership of assets — such as bank accounts, investment accounts and property — into the trust’s name.
Without this step, the trust cannot carry out its intended purpose. Opening a trust account typically involves working with your financial institution to retitle accounts and ensure everything aligns with the trust’s instructions.
Who should consider a Trust?
Trusts are a good option for people who want more control over how their assets are handled. They’re especially helpful for those who want to avoid probate, maintain privacy or provide structured support for beneficiaries.
Families with young children, individuals with complex or high-value assets, and those planning for long-term care or disability often benefit from using a trust. Trusts can also be customized to support charitable giving or multigenerational planning.
A common misconception is that trusts are only for the wealthy. In reality, trusts can be useful for anyone who wants to simplify asset management and ensure their wishes are followed. Another misunderstanding is that signing the trust document completes the process. In fact, the trust must be funded and maintained to be effective.
Trust key terms and questions
A trustee is the person or institution responsible for managing the assets held in a trust. This includes making distributions, handling investments and following the instructions outlined in the trust document. The successor trustee is the person who takes over those responsibilities if the original trustee is no longer able or willing to serve. Often, the person creating the trust serves as the initial trustee and names a successor to step in upon incapacity or death.
When setting up accounts such as savings, retirement or life insurance, you can choose to name either a person or a trust as the beneficiary. Naming a person means the asset will pass directly to them upon your death. This can be simple but may not offer control over how the funds are used.
Naming a trust as the beneficiary allows the asset to be managed and distributed according to the terms of the trust. This can be helpful if you want to provide structured support, protect assets from creditors, or plan for beneficiaries who are minors or have special needs. It also helps ensure consistency with your overall estate plan.
Yes. After your attorney drafts your trust, they will typically provide a list of follow-up actions. These steps are essential to make the trust functional. You’ll likely receive a binder or packet with your trust documents, but that alone doesn’t complete the process. You must take action to fund the trust by retitling assets and opening accounts in the trust’s name.
Funding a trust means transferring ownership of your assets into the trust. This can include bank accounts, investment accounts, real estate and other property. Without funding, the trust cannot manage or distribute those assets as intended. Your attorney and financial institution can help guide you through this process.
If you don’t fund your trust, it may not be able to carry out your wishes. Assets not titled in the name of the trust may still go through probate, even if you have a trust document. This is why it’s important to complete the steps your attorney outlines and work with your financial institution to ensure everything is properly set up.
No. The trust is the legal document that outlines how your assets should be managed. A trust account is a financial account opened in the name of the trust to hold and manage those assets. Both are necessary for the trust to work properly.
Will and Testaments
What is a Will and Testament?
A will and testament is a legal document that outlines how your assets should be distributed after your death. It can also name guardians for minor children, designate personal representatives and express other final wishes. A will gives you the ability to clearly communicate your intentions and ensure that your loved ones are cared for according to your values.
While a will does not bypass probate, it plays a critical role in guiding the court through the process. Probate is the legal procedure that validates the will and authorizes the distribution of assets. Though it can take time and may involve legal fees, having a valid will in place helps streamline this process and reduces uncertainty for your family.
A will is often the first step in estate planning. Creating a will is especially important for individuals with dependents, personal property or specific wishes about how their estate should be handled. Even if you later decide to establish a trust, a will can serve as a backup plan and cover any assets not included in the trust.
The Role of a Will in Your Estate Plan
A will is often the foundation of an estate plan. It allows you to clearly communicate your wishes and ensure that your assets are distributed according to your intentions. While it does not avoid probate, a well-prepared will can make the probate process more efficient and reduce confusion for your loved ones.
In many cases, a will works alongside other estate planning tools. For example, if you have a trust, your will can serve as a backup to cover any assets not included in the trust. This is known as a “pour-over will,” and it helps ensure that all assets are eventually managed according to your trust’s instructions.
A will also plays a critical role in naming guardians for minor children, designating personal representatives and expressing final wishes that may not be covered elsewhere. Even if you plan to use a trust for most of your estate, a will remains an essential document for comprehensive planning.
Key Terms and Questions About Wills
The executor is the person you name in your will to carry out your instructions. They are responsible for managing your estate, paying debts and distributing assets according to your wishes. This role begins after your death and is overseen by the probate court.
A beneficiary is the person or entity you name to receive specific assets. Beneficiaries can be listed in your will, but they can also be named directly on financial accounts like retirement plans, life insurance policies and bank accounts. These direct designations typically override what’s written in your will.
Probate is the legal process that validates your will and authorizes the executor to distribute your assets. It ensures that debts are paid and assets are transferred properly. While probate can take time and involve legal fees, having a clear will helps streamline the process.
Accounts with named beneficiaries, jointly owned property and assets held in trust generally pass outside of the will. This means they are not subject to probate and are not controlled by the executor. It’s important to understand how these assets are titled and designated to avoid conflicts or unintended outcomes.
No. Your will only governs assets that are solely in your name and do not have a designated beneficiary. Assets with joint ownership or named beneficiaries typically pass directly to those individuals, regardless of what your will says.
Yes, but you should be intentional about which assets go where. Naming a person means they receive the asset directly. Naming a trust allows the asset to be managed and distributed according to the trust’s terms. This can be useful for minor children, structured distributions or privacy concerns.
The beneficiary designation on the account will usually take precedence. That’s why it’s important to review your account setups when creating or updating your will. Misalignment between your will and your account beneficiaries can lead to confusion or disputes.
Yes. A will can serve as a backup for any assets not included in your trust. It also allows you to name guardians for minor children and express final wishes that may not be covered by the trust.
Estate planning is just one part of your financial journey — explore more tools, tips, and resources.
*The information provided on this website and within Westerra Credit Union’s financial education resources is for educational and informational purposes only. It is not intended to provide, and should not be construed as, financial, investment, tax, legal, or healthcare advice.Westerra Credit Union does not offer or provide guidance on individual tax situations, legal matters, or healthcare decisions. You should consult with a qualified financial advisor, tax professional, attorney, or healthcare professional for advice specific to your personal circumstances.While we strive to ensure the accuracy and timeliness of the information presented, Westerra Credit Union makes no guarantees or warranties, express or implied, regarding the completeness, reliability, or suitability of any information, products, or services referenced herein.Your use of this website and participation in any financial education materials or programs signifies your acknowledgment and agreement that Westerra Credit Union is not liable for any losses or damages that may arise from reliance on the information provided.
