Wills

A will is a legal document that spells out your wishes regarding the care of the children as well as the distribution of the assets after the death of the parents.

Trusts

It is a legal relationship that the owner of property who gives it to third party or entity who must keep and use it solely for a third party’s benefit.

KEY FOR WILL

What Does a Will Cover?

A will allows you to direct how your belongings—such as bank balances, property, or prized possessions—should be distributed. If you have a business or investments, your will can specify who will receive those assets and when.
A will also allows you to direct assets to a charity (or charities) of your choice. Similarly, if you wish to leave assets to an institution or an organization, a will can assure that your wishes are carried out.
While wills generally address the bulk of your assets, some aren't covered by their instructions. Those omissions include payouts from the testator's life insurance policy. Since the policy has specified beneficiaries, those individuals will receive the proceeds. The same will likely apply for any investment accounts that are designated as transfer on death.
In addition to directing your assets, a will states your preferences for who should take over as guardian for your minor children in the event of your death.

Wills and Trusts

A will is also helpful even if you have a trust—a legal mechanism that lets you put conditions on how your assets are distributed after you die and, often, to minimize gift and estate taxes. That's because most trusts deal only with specific assets, such as life insurance or a piece of property, rather than the sum total of your holdings.

You might also consider setting up a trust as a way to provide for a beneficiary who is underage. Once the beneficiary is deemed capable of managing their assets, they will receive possession of the trust.

Even if you have what's known as a revocable living trust into which you can put the bulk of your assets, you still need what's known as a pour-over will. In addition to letting you name a guardian for your children, a pour-over will ensure that all the assets you intended to put into the trust are put there, even if you fail to retitle some of them before your death.

Any assets that are not retitled in the name of the trust are considered subject to probate. As a result, if you haven't specified in a will who should get those as

What Happens if I Don't Have a Will?

If you die intestate—that is, without a will—the state oversees the dispensation of your assets, which it will typically distribute according to a set formula.

Because of the elective-share and community property provisions mentioned above, the formula often results in half of your estate going to your spouse and the other half going to your children. Such a scenario sometimes results in the sale of the family home or other assets, which can negatively affect a surviving spouse who may have counted on the bulk of your assets to maintain their standard of living. Further complications may ensue if your children are minors, as the court will appoint a representative to look after their interests.