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Estate Planning Basics: 7 key terms to understand

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Did you know? Six in 10 adults in the U.S. haven't taken time to draft a will as part of their estate plan.

1. Trust

A trust is a legal arrangement used to manage your assets during your lifetime and after you've passed away. You create the trust (typically with the help of an estate planning attorney, trust officer, or financial planner) and transfer the assets you want managed into it. The trust beneficiaries are the people you designate to receive assets from the trust. Assets you might transfer into a trust include real estate, bank accounts, and investment accounts.

2. Trustee

A trustee is the person or organization, such as a bank, who's in charge of the trust. You can act as your own trustee or choose someone else, such as a family member or trust officer, to take on a trustee role. You can also name successor trustees, whose job is to manage the trust after the primary trustee passes away or is no longer able to carry out their duties. Trustees are held to a fiduciary standard,which means they're required to act according to your wishes and in your best interest.

3. Revocable Trust

A revocable trust simply means that the trust can be changed, revoked, or terminated after it's been established. This is different from an irrevocable trust, in which the transfer of assets is permanent.Generally, you aren't able to take assets out of an irrevocable trust, but you can change the beneficiaries, update your trustee designation, or make changes to the trustee's duties.

4. Will

A will, or last will and testament, is another legal way to manage your assets after you pass away. Surprisingly, only 42% of adults have established a will.3

You can use a will to:

  • Name an executor for your estate
  • Name guardians for minor children
  • Make financial arrangements for pets
  • Outline your wishes for funeral and burial arrangements
  • Spell out how you want your assets to be distributed to your heirs

Each state has specific rules for drafting a will and requirements to make it valid. You can have both a trust and a will. Wills are subject to probate, whereas a trust is not. Probate is a legal process where the will is verified, your assets are inventoried, your outstanding debts are paid, and any remaining assets are divided as outlined in the will. A will becomes public record but a trust doesn't, offering more privacy.

5. Executor

An executor, also known as a personal representative, is the person you appoint to carry out the terms of your will. The executor is responsible for initiating and overseeing the probate process. An executor can also be a beneficiary of your will, meaning they can receive some of your property or assets when you die. An executor who's also a beneficiary can't be a witness to the signing of your will.

6. Guardian

If you have children who haven't reached the age of majority (18 years old in most states) or an adult child with special needs — you can use a will to name a guardian for them. A guardian is typically only responsible for taking care of children, but they can also act as a conservator, meaning they are responsible for managing financial matters for minors or adult children with special needs.

7. Heirs

Your heirs are the people who are legally entitled to inherit your property under your state's inheritance laws. This includes your relatives, such as children, grandchildren, siblings, aunts, uncles, cousins, or even your parents. Depending on the state, spouses may be considered heirs and are generally first in line to inherit under state inheritance laws.

Talk Estate Planning with an expert

Working out the details of your estate plan becomes easier when you have someone who's fluent in the language of wealth management on your side. If you're unsure of how or where to begin, Synovus is here to help. Call us at 1-888-SYNOVUS (1-888-796-6887) to connect with a trust expert who can assist you in navigating the estate planning landscape.


 
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Important Disclosure Information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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Trust services for Synovus are provided by Synovus Trust Company, N.A. Investment products and services are not FDIC insured, are not deposits of or other obligations of Synovus Bank, are not guaranteed by Synovus Bank, and involve investment risk, including possible loss of principal invested.

  1. Consumer Financial Protection Bureau. "What is a fiduciary?", ConsumerFinance.gov, accessed June 2018.

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  2. Federal Deposit Insurance Corporation. "Revocable and Irrevocable Trust Accounts," FDIC.gov, accessed June 2018. Back
  3. DiUlio, Nick. "More Than Half of American Adults Don't Have a Will, 2017 Survey Shows," Caring.com, accessed June 2018.

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  4. FindLaw. "State Legal Ages Laws," FindLaw.com, accessed June 2018. Back