A Last Will and Testament is more commonly known simply as a “will.” This is the legal document that controls the distribution of your possessions at the time of your death.
A will does not address life insurance, retirement benefits, trust assets or jointly owned property. All of these things have their own designations and processes for distribution. For example, life insurance and retirement benefits each have beneficiaries that are assigned when the accounts are created. Jointly owned property simply stays with the remaining owner(s) after death. Assets held in a trust pass in accordance with the terms of that trust.
A Last Will and Testament appoints an Executor to administer the estate, pay final expenses and distribute the assets. Ideally, the Executor will be a trustworthy, professional and impartial individual who has a financial background and some administrative or management experience. They will need to make sure all creditors are protected and all assets are distributed in accordance with the will and the local laws, so it can become an involved process.
In order for a will to be valid, the person writing it must be “of sound mind and body.” This means they have basic competency, are aware of what they are signing and aware of what will transpire after their death.
It’s important to note that a Last Will and Testament is not the same as a Living Will. A Last Will and Testament addresses the distribution of your assets, the things you own, after your death. A Living Will addresses you, your physical body and your healthcare. Both documents are critical to ensure proper handling of your estate and your medical wishes.
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