The Basics of Wills and Trusts

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 A  Last Will and Testament is a binding document where a person states to whom they want their assets to go to after their death and may include many other provisions, such as their desires for funeral arrangements, guardians for their minor children, trusts for people such as minor children and even provisions for their dogs! Wills are a very complicated area because each state’s laws are very different and what happens is dependent on so many factors.

Assets will go through probate – court proceedings – where an administrator will be appointed to essentially do the work that an executor would if there had been a will. The difference is that while an executor follows the desires set out in a person’s will (in most cases unless they are contrary to the laws of the state) an administrator will distribute things according to the laws of the state. It varies from state to state, but usually, it goes as follows: 1. Surviving spouse. 2. Issue (children). 3. Parents. 4. Issue of parents. 5. Grandparents/issue of grandparents. 6. Next of kin. Usually, if there is anyone still living within a group, that group will divide the entire estate, but there are many exceptions.

This includes assets that will go by trust, and assets where legal beneficiaries may be stated such as pensions, bank accounts, stock portfolios and the like.

Also known as a medical or advance directive or an “instruction directive” in New Jersey, it is a document that allows a person to refuse life-sustaining medical treatment when there is no reasonable expectation for recovery. 

While wills deal with a person’s assets and desires after they have died, trusts deal with things both before and after. There are many types of trusts and a trust can be a separate document or put into a will. A “Living Trust” is a type of trust created while a person is alive where they legally place a lot, if not all, of their assets into the trust and generally will administer it by themselves.