It’s good to have all your assets listed, net worth calculated, personal information, passwords, emails, etc. laid out for your surviving relatives, but this is not enough. If you don’t have an estate plan your assets will have to go through probate, where a judge will decide how to divide your estate according to your state laws. Once in the court system your will, your assets, and everything attached to your estate, including who inherits each asset, will become public information. This can be a long, expensive process. It can be frustrating and cause contention within your family. This is not a situation you want your loved ones to endure.
It’s better to have a will. In a will, you can dictate who should receive your assets and how you want your possessions distributed. Unfortunately, as previously mentioned, this will not save you from probate. The only thing that changes is the judge will divvy up your assets based on your expressed wishes. Your assets will still be locked up and inaccessible to your heirs until the legal process has run its course, again costing your family time, money, and a bucket load of frustration.
The best way to protect your assets and your loved ones is to create an estate plan that includes a revocable living trust (trust). A trust allows you to not only dictate who gets what, but also when and how, along with whatever other provisions you would like to include. A living trust avoids the lengthy, expensive, public probate process.
A living trust is a legal arrangement set up by someone (the grantor(s)) to protect their assets and their wishes for their family. A living trust designates a trustee and gives exact instructions on how things should be handled at the time of the grantor’s death. The trustee then manages the assets contained in the trust according to those directions and the beneficiaries’ best interests.
Within your trust you can decide not just what your heirs will receive, but when and how. This helps protect your heirs from themselves, irresponsible spending, unforeseen issues that may arise in the future, or from your assets going to unintended people. Some people may want to provide specific benefits to children or grandchildren, like college funding or help with buying their first home. It can also help protect assets for your adult children in the case of divorce. Having a trust is particularly important when there is a second marriage, as the state laws may not distribute assets the way you want.
A trust brings all of your assets together into one plan and provides beneficiary designations. This provides protection and privacy for your estate and loved ones. And because a trust is revocable while the grantor(s) is alive, the directions and stipulations set forth can be changed and revised at any time by the grantor.
Taking care of your family doesn't have to end at death. IF you take the time to establish the appropriate estate plan and include a living trust, your care and protection of your family and loved ones can continue long after death.
Photo by : Kevin Delvecchio
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