Continuing the theme of getting your house in order by focusing on one task at a time, your family’s financial footing can be established before February. Last week we highlighted life insurance. This week let’s consider trusts and wills.
Fact is, most Americans don’t have a will, let alone a revocable living trust which is a vehicle to transfer your assets (including a home, other real estate, automobiles, stocks, bonds, securities and the like) while living. Anyone who has dealt with the estate of a deceased family member who didn’t have solid plans in place will tell you how frustrating, time-consuming, and expensive it is to get everything sorted out.
If you pass with no will or trust in place the courts will follow state law to distribute your assets—no matter what you may have once promised your sister or told your spouse. If you pass with only a will in place, the courts will have to give the document a stamp of approval before divvying up your estate. This is known as probate, and the cost of this unnecessary judicial step can eat up more than 5-10% of your estate’s value and ensnare your heirs for a year or longer in a legal tangle. Don’t give away your hard earned assets.
Create a revocable living trust.
A revocable living trust allows your heirs to avoid probate entirely and keeps you in complete control of your finances while you’re alive. You can always make changes to what’s in the trust and to how you’d ultimately like it managed or disbursed. When you pass, the person you designate as your trustee simply takes over and follows your wishes. Hiring an estate attorney to review your finances and set up a revocable living trust may cost $1,500 or more, though it can certainly be money well spent.
Have a will as well.
If a revocable living trust protects your major assets from probate, a will is where you carefully specify how you want your noninvestment possessions to be disbursed. Your great-grandma’s wedding ring, the heirloom piece of furniture, that cherished purse collection, pots or dishes —all of it should be itemized in a will. Please do your family a huge favor by being as detailed as possible. Even if your children love each other to pieces now, petty arguments can easily arise if you don’t have everything spelled out.
Next week, we will highlight a living will.
Think and do activities that demonstrate your freedom.
This has been our money kingdom financial perspective.
May I AM THAT I AM GOD prosper you.