Guardians need a will
For parents of minors.
All tracks and lessons
Wills and living trusts
A will says who gets what and who cares for children; a living trust can pass assets without probate. Many people need at least a will.
In this lesson you will
- Compare a will and a living trust
- Know why beneficiary designations matter
- Understand what happens without a will
Estate planning decides what happens to your money and responsibilities if you die or cannot act for yourself. Two common documents are a will and a revocable living trust.
A will
A will names who receives your property, an executor to carry it out and, importantly for parents, a guardian for minor children. Wills generally go through probate — a court process that can take time and is public.
A revocable living trust
You move assets into a trust you control during your life. At death, a successor trustee distributes them according to the trust, usually without probate. Trusts cost more to set up and only control assets actually placed in them.
Beneficiary designations come first
Retirement accounts, life insurance and many bank accounts pass to the beneficiaries named on the account, regardless of what a will says. Keep them current after marriage, divorce or a birth.
Without a will
If you die without one, state law decides who inherits and a court appoints a guardian for minor children. Rules vary by state — this is general education, not legal advice.
By the GetGuac team · Editorial policy
Three ideas to keep
Beneficiary forms override wills
For many accounts.
Trusts only hold what you put in
Funding the trust matters.
Do it in 4 steps
List assets and how they pass
Will, trust or beneficiary form.
Update beneficiaries
On every account.
Choose executor and guardian
And ask them.
See an estate attorney
For documents valid in your state.
How each asset passes
Illustrative household.
| Asset | Passes by |
|---|---|
| 401(k) | Beneficiary designation |
| Life insurance | Beneficiary designation |
| Joint bank account | Usually to the surviving owner |
| Car and personal items | Will (probate) |
| Home held in a living trust | Trust (successor trustee) |
A will alone did not control the two largest assets — the beneficiary forms did.
Where this usually goes wrong
- Outdated beneficiary forms
- No guardian named for children
- Creating a trust but never moving assets into it
Log in to one retirement account and check who is named as beneficiary.
Tools and guides for this lesson
Quick quiz
1. What can a will do that matters most for parents?
2. A 401(k) usually passes by…
3. A living trust only controls…
0 of 3 answered
Puzzle
Assets: 401(k) $120,000 (beneficiary named), life insurance $250,000 (named), car $15,000 and savings $10,000 (no beneficiary). How much would pass under the will?
Show the answer
$25,000
Car $15,000 + savings $10,000 (assuming no payable-on-death designation on the savings).