When it comes to taking care of your Estate Plan many people wonder what is better for them a Will or a Living Trust?
This raises many questions such as:
- Do I need to be wealthy to benefit from a Living Trust?
- How much money do you need to have a Living Trust?
- What is the basic reason for having a Living Trust vs. a Will?
- Is a Trust necessary if you already have a Will?
All of these are important questions to consider.
By the way, people usually start to think seriously about these issues as they approach retirement age. If that sounds like you then you need to check out our FREE RETIREMENT VIDEO HERE.
Do I Need To Be Wealthy To Benefit From A Living Trust?
The short answer is NO!
This is a very common misconception, but the truth is you do not need to have a certain amount of wealth to have a Living Trust.
In the state of Illinois if you have any unpaid debts or taxes and have assets over $100,000 then you DON’T qualify for simplified procedures to settle your estate.
What does that mean?
It means if you do not have some kind of estate plan you are likely leaving your family a big mess as your estate will have to be probated. (more on this in a minute)
It also shows just how little you have to have before the State government gets involved in your affairs at death.
If you do not have an Estate Plan, be assured the Government has one for you, but you might not like it!
Will Vs. Living Trust
For most people, both of these documents are put in place with the same concern in mind.
How do I make sure my family is taken care of and get all of the savings and possessions I have worked hard for over my life without causing a big fuss?
And how do I make sure the people and the causes I care most about benefit instead of letting the Government dictate who gets what?
Both a Will or a Living Trust can help with these objectives but here is the big kicker, Wills needs to go through the process called Probate and a Living Trust generally does not.
Why is that important?
Continue reading or watch this short video…
Will’s Vs. Revocable Trusts Which Is Best For Rockford Retirees?
Why Is Probate And Why Do People Want To Avoid It?
Probate is the process of validating your Estate Plan and it takes place in the court system.
The two big reasons people generally want to avoid probate are:
The probate process can sometimes take years to complete and your assets are generally tied up or frozen during the process.
In the case of my own family, when my Dad passed away it took about a year and a half before we completed the probate process.
And this was a fairly simple estate where we all got along, did NOT argue, and Mom got everything.
This time-lapse can cause serious problems.
- What happens if we want to sell the property right away, but we do not own it yet?
- Arguments between family members can arise during the delay.
- Creditors could appear from out of the woodwork when the estate is made public.
- Accounting for each asset and its actual worth can be tedious and problematic.
- Family members often want closure and probate drags things out.
- Assets can not be accessed by intended recipients until the process is complete.
Every time an important decision has to be made your heirs will have to go to court and they will likely take an Attorney with them.
Is that Attorney going to work for free? No Sir.
Again, in the case of my family, my Dad had a Will, but it costs us over $7,000 to hire an Attorney to help us go through the probate process.
So, while it was good that my Dad at least did some Estate Planning, it likely would have gone a lot faster and cost us a lot less if he had done a Living Trust.
And this is true even though a Living Trust is generally more expensive to set up initially than a Will.
Why Have A Living Trust Instead Of Just A Will?
A Living trust generally helps avoid probate. How?
By placing assets into the trust now while you are alive you can maintain control of the assets in the present and transfer control to a successor trustee when you pass away.
You get to decide who that trustee will be, and you can even change your mind.
Other benefits of a Living Trust are:
- Living Trust assets are private unlike assets passed on in a Will
- Living Trust assets can offer additional protection from creditors for your heirs
- Living Trust assets can offer additional protection from divorce for your heirs.
- Living Trust assets can be accessed much faster than assets passed by a Will.
- Living Trusts can not be contested so your wishes are more nailed down.
- Living Trusts may save you money in the long run as probate can be eliminated
When talking to my retired clients in Rockford many of them have already been through this process with at least one parent or relative.
Most people that had a trust tell me about how easy the financial transition was because of their relatives’ careful planning.
On the other hand, clients whose parents had Wills often tell me about the mess they were left that they had to deal with.
If you need help creating your Estate Plan, we work with a firm that has been assisting people to set up these plans.
To get a general idea of how they work please watch the attached VIDEO HERE.
Make sure to contact me for an Estate Planning meeting if this sounds like a fit for you.
By the way, if you have not watched our FREE retirement video on, How To Avoid Going Broke In Retirement While Securing Your Nest Egg! Then you really need to CLICK HERE NOW.
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