Trusts, Gifts and Estates term paper (ANY TOPIC) Essay

Trusts, Gifts and Estates term paper (ANY TOPIC) - Essay Example This results to the preservation of a harmonious familial relationship and the achievement of several financial benefits such as the creation of cash reserves and the after-tax income available. According to Brown and Myers (2008), it is important to underscore that the primary objective of all family estate planning is to provide psychological and financial security by obtaining â€Å"the maximum benefits of principal and income for the family and to pass on the family property intact (i.e. without losses)† (23). The last will and testament is an excellent example of estate planning and administration. There is also the case the revocable living trust. Both of these are popular choices for people seeking to manage and administer their assets and properties. This paper will explore why the revocable living trust can prove to be more beneficial for everyone than the last will and testament. Background The last will and testament or more generally known as the will is a legal do cument that provides the disposition of assets and properties. Simply put, in case of death, the ownership of a property is transferred according to the terms of the will of the deceased, the terms that document his desires particularly in the distribution of his estate and assets (Wardle and Nolan, 1042). Gau (2004) provided another definition, which states that it is â€Å"an expression of a person’s wishes for the disposition of property and the protection of loved ones at the time of the maker’s death† (7). The US legal framework considers the use of will as a developmental offshoot of basic estate planning, that one with the simple goal of planning for death (Wardle and Nolan, 1039-1043). It was further provided that the impetus for the development of wills was the need for federal estate tax planning for death and lifetime transfers (1039-1040). Baker wrote that the key is to keep it up to date because a clearly defined will could be the best piece of lega l work that one could have that can be used to honor one’s wishes and in defining the family’s futures (52). She also stressed that the will is a reliable backup to a trust in the estate planning process, in addition to several conditions, which she has listed such as: The fact that there are properties that are better left in a will; Money such as lottery winning can be distributed after death through a will and as a component of an estate plan; Parents with minor children. The will can name the guardian and the administrator of assets and properties before the children reach legal age; The appointment of an executor; and Disinheriting a person (Baker, 53-54). There are many other instances where the will is indispensable. It is important for people interested to draft their own wills to consult an estate planning professional or an estate planning team. The process may be simple, but there is a requirement to be thorough, clear and detailed so that the documented wou ld not be invalidated, contested and misinterpreted. It is also important to highlight that if assets are to be transferred through a will, the maker is necessarily deceased. The utility of the will as explained in this section does not mean that there are no other alternatives. There are several others that people prefer because it is more beneficial or that it is aligned with their own estate planning objectives. The Revocable Living Trust