I bet your biggest heroes are the people who do the most for their families. Right? Those are the people most highly rated in the Pilgrim book I can tell you that. Well, if you want to be a hero to your family, get a trust or will and make sure the accompanying documents are updated every couple of years.
Why Worry About This?
Trusts and wills help insure that your assets will flow to the people of your choice after you die. Trusts and Limited Powers of Attorney appoint people you trust to manage your financial affairs if you are unable to do so yourself. Health Powers of Attorney appoint someone you trust to make medical decisions for you if you are incapacitated.
If you don’t care about what happens to you or your money and you don’t care that your family will have to clean up your estate mess when you are incapacitated or dead, you don’t need to worry about any of this. Otherwise, you do have to be concerned.
I am sure that Sonny Bono (famed husband and musical partner to Cher and mayor of Palm Springs) loved his family but his actions put them all in world of hurt after he hit a tree while skiing in 1988 and died. He didn’t have a will or trust and as a result, the sparks began to fly soon after his death. His wife petitioned the court to be appointed the administrator of his estate and his ex-wife Cher filed a huge claim against his assets. To make it worse, other skeletons came out of the woodwork and the entire affair became a huge, expensive mess.
So if you care about yourself, your family or your money, it’s smart to take care of this.
Neal’s Notes: If you go to all the trouble of putting together your estate plan, why not go the extra mile to make sure everyone in your family understands and supports your financial plan?
Trust or Will?
I’m not an attorney and you should definitely seek out professional legal counsel. But for my money, the trust has a lot of benefits. It can provide shelter from probate, privacy and control that a will can’t. It also reduces the wiggle room disgruntled would-be-heirs have to sue and try to get their mitts on your money. (Here’s a post that discusses the differences between trusts and wills in greater detail.)
As I said, a trust works better for most people than a will but a will is certainly better than not having anything. If you die without either estate planning document in place, the state gets to decide who gets what. This is very expensive and time consuming and a great way to lose total control over everything you worked all your life to accumulate.
One reason people don’t get a will or trust is cost. Here’s an introduction to Legalzoom – a legal self-help service that helps consumers keep costs to a bare bone for wills and trusts.
Why People Don’t Get Their Financial House In Order
Nobody likes thinking about dying and I believe this is the greatest obstacle to proper planning. Another reason people use for not doing a trust or will is that they aren’t 100% sure how to divvy up the loot. They don’t want to create problems and resentments in the family because there may not be a clearly fair way to split up the assets.
If these problems plague you, I understand. Depending on the heirs involved, someone is going to end up feeling like they got the short end of the pickle. But if they are those kind of people they are going to feel that way regardless of what you do. Your best chance of making sure these resentments don’t surface after you are gone is to discuss them with everyone while you’re still here. And keep in mind, you can always change your trust or will anytime you like. Nothing is written in stone.
Most people I know really want to make sure their loved ones are well cared for after they are gone. The best way to do that is to create a will, trust and/or accompanying estate documents. Don’t worry if you aren’t sure about the particulars. In this area of your financial life, doing something (even if it’s less than perfect) is usually far better than doing nothing.
Have you created a trust a will? Which? Why or why not?