There are three main types of estate planning
State’s plan for you
Will based plan
Trust based plan
The first type is the State’s Plan: Dying without a Last Will and Testament, or Intestate, leaves your estate planning to your State of residence. Each state has laws on who receives your property and how they receive it. The laws usually require an appointment of a personal representative or an executor to handle your affairs. Without a will the courts often require the executor to post a bond to probate the estate.
The second type is a Will Based Plan: These plans are prepared for the benefit of people and organizations of your choosing. You also have the opportunity to choose the personal representative of your estate. The Will is a roadmap of how your property is to be disbursed by the personal representative in the probate process. A will also allows parents to name a guardian for their minor children: where in the State’s Plan, naming a guardian is up to the courts.
And finally, the third type is a Trust Based Plan: A trust is an agreement where one party holds property for the benefit of someone else. Unlike a will, the trust takes effect as soon as it is created and directs how property is disbursed before death, at death and after death. A trust plan does not go through probate and retains privacy for the beneficiaries.