Not having a will or trust can be hazardous

Whether it’s due to procrastination, the expense, a perceived lack of assets or denying one’s own mortality, many Americans don’t have a plan in place to properly transfer their assets at the time of their death.

To every reason, BOK Financial® trust officer Michael Sears has a quick response: "It just needs to be done."

"By being proactive, you'll save those you love a lot of time and trouble and then be assured that your assets and possessions will be distributed on your terms, not anyone else's," he explains.

Do you need a 'simple will' or a trust?

If you want the quickest and least-expensive way to plan for your asset distribution—or you don't have a lot of assets—then you might just need a will. Simply put, a will is a legal document that states how you would like your assets distributed after you die and whom you would like designated as guardian of your children or other dependents.

It's more expensive and more time-intensive to add a trust to your estate plan, but doing so also has benefits, including:

• Helping avoid probate: Probate, a court-supervised process of distributing assets, makes many of the deceased's known assets public and possibly subject to claims from current creditors. Even without a prolonged battle, probate can take months, if not years, and then leave little for those who felt they had a claim to the assets, Sears cautioned. One note: Jointly titled assets and assets with designated beneficiaries—like a bank, brokerage or retirement account—are often passed outside of probate.
• Keeping your plans and wishes private: Instead of being filed with the court, a trust can be administered by your designated trustee who has private knowledge of what goes where or to whom. The trustee's duty is to share that information with the beneficiaries, but it generally does not become part of a public record.
• Securing assets for future generations: Unlike a will, a trust can stipulate the adult ages at which your children would receive their assets. By doing so—instead of gifting them outright—you can help protect those assets from being spent unwisely. "I've seen an uptick recently in these arrangements,” Sears said. “Many beneficiaries are not ready for the responsibility of assets and could prematurely reduce or deplete them.”

Meanwhile, with both a will and a trust, you get the benefit of having your affairs in order. This decreases the burden on your family, helps reduce squabbles or litigation and makes the asset transition easier by helping ensure that assets pass according to your wishes. Without an appropriate will, trust or beneficiary designations, statutes that vary by state may stipulate distributions differently than you'd envisioned, even within families.

Who creates and administers wills and trusts?

Estate planning attorneys typically prepare documents such as a will or trust, financial and healthcare powers of attorney, advance directives for healthcare decisions in the event of disability or incapacitation (such as a living will) and even directions for bequests or planned charitable giving.

A grantor's wishes are usually carried out by a named executor or a corporate trustee, who can act from a neutral or independent perspective. Unlike a family member or friend serving as trustee, an independent trustee can make decisions regarding distributions without emotion, helping to keep true to the trust's instructions and the grantor's intent.

Once the documents are completed, experts recommend making their location known to a trusted friend or advisor. These documents should also be reviewed every three-to-five years or as life changes due to factors such as illness, divorce or death of an heir.

When to create a will? Right now.

Having assisted clients and families with many uncomfortable and unnecessary situations, Sears recommends acting as soon and decisively as possible.

"You owe it to yourself and your loved ones to document your intentions—and to save everyone the heartache and expense of your not having done so."