A simple will is a document that declares a person's intent for the distribution of their assets posthumously. If no will exists, intestacy laws take over. A trust is a private means to manage assets post-death, and the U.S. estate tax applies only to large inheritances.
A simple will is a document that expresses a person's wishes for the distribution of their assets after death. It can take the form of a handwritten letter, but such wills can be challenged easily in court due to questions of validity. Wills are also very public, allowing anyone to see the details of the deceased's estate and the beneficiaries.
When someone dies intestate, meaning without a will, state intestacy laws dictate the distribution of assets. These laws outline a hierarchical order for beneficiaries, typically starting with the spouse, followed by children, parents, and siblings.
A trust is another estate planning tool that serves to transfer assets privately, outside of probate court. After an individual's death, the executor and trustee work hand in hand to manage the asset transfer according to the deceased's instructions. Most often, these instructions become irrevocable upon death, cementing the decedent's wishes.
The United States imposes an estate tax on inheritance above a certain threshold, which has changed over time. This tax applies to a small percentage of estates, mainly those exceeding several million dollars in value, reflecting a societal choice to limit the amount one can bequeath without taxation.