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Do You Need a Trust or Just a Will? - By John R. Bullis, CPA

Updated: Feb 21, 2023

Each person has an estate. It can be large or small. It includes all of your personal property, money, bank accounts, retirement accounts, insurance policies and real estate that you own.

A Will is one way to direct how what you own is to go at your death. If you don’t have a Will or a Trust then the items that are not jointly owned or that have a beneficiary designation will be distributed according to the state law.

An important provision in a Will is who is to care for and raise your children when you are no longer around. Indicating the Guardian of your children is usually done in your Will.

A Trust usually is not a tax shelter. A Charitable Remainder Trust does give something to your favorite church or charity and also gives you some tax savings.

Almost all other Trusts mainly direct how your property is to be distributed at your death. It can provide for someone with special needs and also give direction of what to do (and who does it) in case of your severe illness or bad accident.

Another way to transfer some items you own, like bank accounts, is to title the account in a special way. Most banks and credit unions will help you title the account “TOD” for ‘transfer on death’ or “POD” for ‘pay on death’. That will also indicate who receives that account after your death without being subject to probate of your Will or operation of your Trust.

Certain items will pass to the beneficiary you designate. Examples are life insurance, annuities, retirement accounts and other items that have a beneficiary designation. Those items are not subject to probate of your Will and usually are not included as property in a Trust.

It is best to have an attorney prepare your Will and/or Trust. That will help you consider various possibilities and the attorney will help you have the proper signatures and witness procedures.

Your attorney will almost always also prepare Power of Attorney forms for medical and financial matters. Those can be very important if you have not died but need someone to help with those matters.

After all the documents are signed, you still have a need to review them at least every two or three years. Changes happen to everyone. Your heirs, beneficiaries, authorized individuals might need changing because of changes in your situation (or theirs).

Did you hear “Without goals, and plans to reach them, you are like a ship that has set sail with no destination.” Fitzhugh Dodson

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