The key thing to remember about a will is that it really only becomes effective in most cases when it is filed with the probate court and a judge approves action based on your will. That brings us to trusts, which most commonly you might hear referred to as living trusts, family trusts, or revocable trusts. A trust is a legal agreement that allows you, the grantor, or person putting assets into the trust, to appoint a trustee to manage those trust assets on behalf of the beneficiary(ies).
This is a scenario we call “intestacy” or where someone has died “intestate”—intestate means without testamentary documents like a will or trust. Intestate succession laws attempt to distribute property to the person’s next closest relatives.
Estate planning involves setting up a plan that establishes a clear procedure for questions like who would manage your affairs if you became incapacitated or passed away and who will eventually receive your assets after you pass away. Estate planning is important for many reasons. Perhaps the biggest benefit is removing the uncertainty from who, when, and how your estate will be handled when you pass away or are no longer able to manage your own finances or healthcare.