Whether you have a Will or a Trust, when you die, your estate won’t be wrapped up in a matter of days or weeks. One problem that often arises is a lack of liquidity or cash.
In an effort to assure that nothing goes through Probate court, many people place beneficiary designations on every asset. Those end up going directly to the beneficiaries. The remaining asset become the real estate which must be sold. This real estate will still require upkeep, payment of utilities and taxes, and possibly mortgage payments while it sits on the market.
After a death, there are questions concerning the payment for the funeral and other related costs. Who will foot these bills out of their own pocket, if there is no cash in the estate.
If the estate must go to Probate, there will be cash needed for the filing fees and costs, attorneys fees, etc. Again, one person will be out of pocket unless this is planned for ahead of time.
If you have a trust and there is an account with cash, that will assist the successor trustee in being able to pay the bills. If you have a Will, it may be important to make sure that you either do have an account that does not have any specific beneficiary, or to have a small amount of life insurance available.
In this way, those that come after you will have the ability to wrap up your estate in accordance with your wishes – without having to front the costs themselves.