by Martin J. Stephens

Created on: January 21, 2009   Last Updated: April 24, 2012

According to the National Center for Health and Statistics, 2,420,000 people die every year* in the United States. Roughly 40% of these are unexpected. How many of these people made proper provisions for their loved ones?

Most people procrastinate making plans for their death, leaving it for old age, or terminal illness. Yet if left too late, the aftermath to your loved ones can be devastating. Coping with the emotional tension can compound the stress of taking care of your financial affairs through local courts. Funds may be frozen for months or years awaiting the court's decision regarding your assets. Estate taxes can quickly eradicate funds intended for your children or other loved ones. Division of possessions can irrevocably split family members. Why not instruct them how to take care of these matters?

Although there are many instruments available, wills and trusts are the most often used tools that can eliminate much stress and financial loss associated with death. What are they? How do they work? More importantly, how can they work for you?

A will is a legal document usually drafted with the help of an attorney in which you give certain instructions to be carried out after your death. These instructions can include: designation of a guardian for your minor children, name beneficiaries who will receive the assets of your choice, appoint someone to execute these instructions, as well as creating trusts. What assets does a will cover?

A will generally covers any asset that is titled in your sole name at death. This includes tangible property such as: cars, boats, buildings, roads, parking lots, real estate and dock slips. A will may also include intangible property such as: stocks, bonds, promissory notes, copyrights, patents and trademarks. What does a will not cover?

Assets that already have provisions built in, such as life insurance policies, retirement plans, joint tenancy bank accounts and real estate, brokerage accounts with "transfer on death" provisions, and trusts. Additionally, some states have community property laws, which usually stipulate that most assets acquired after marriage are to be split equally, whereupon your will effects only your half of the assets. An estate planning attorney in your state of residence can assist in guiding you through these legal matters, and can provide invaluable aid in drafting such an important document. They can also help you in drafting a trust. What is a trust?

A trust is a legal agreement where you,

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