"See...we plan ahead, that way we don't do anything right now. Earl explained it to me..."
-Kevin Bacon, Tremors
Nothing is ever lost; nothing is ever
created. Rather, everything is transformed. The “magic” law of conservation of
mass was first expressed by the French scientist Antoine Laurent de Lavoisier.
This
Speaking of transformation, estate
planning is an important aspect of a big transitional event for your family.
Many people don't think about estate planning because they figure that when
they die their affairs are no longer a problem. They assume their assets
automatically go to their family. Others simply hold resentment or insecurities
from their own past that prevent them creating an estate plan. They figure that
since no one conducted estate planning for them then they shouldn't for their
own family. This is all nonsense.
Without planning, when you die, the
assets and debts you leave behind will go to probate court.
The cons of probate are what
drive people to try to avoid it. The main problem with probate is that it
is time consuming and expensive. It is also something you simply cannot ignore.
Many states require 30 to 90 day waiting periods as part of probate. If a
relative or potential heir decides to contest the will or the court's
asset distribution, the process can take even longer. In addition, the court,
attorneys, assessors, and other professionals involved all charge fees for
processing an estate. These fees typically come out of the estate itself.
Without estate planning, when you die
not only will your family be full of grief, they will have to go through a long
and expensive court process in order to divide up your assets. Gee thanks. What
a way to go!
This can all be avoided and the money
you saved throughout your life can go to the exact people you want it to. All
you have to do is create a few documents. The most popular being a revocable
trust. The other is a will.
A trust agreement is
a document that spells out the rules that you want followed for property held
in trust for your beneficiaries. Common objectives for trusts are to reduce
liability, to protect property in your estate, and to avoid probate. A
revocable trust essentially is a bucket to hold assets while you are alive. You
can move assets in and out of the trust as you please, and when you die, the
assets will be distributed to whom you wish as the trust specifies.
The other document you will want to have is a will. A will is a legal document by which a person, the testator, expresses their wishes as to how the property will be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.
Although the
revocable trust supersedes the will, the revocable trust only
controls assets that have been placed into the trust. You need
a will because it helps with the distribution of assets that are not under a
trust.
Trusts and wills can be a big help to
families after their loved ones die. Take into account the recent death of the
famous musician Prince. He did not have a will or trust. Now his estate is in
probate and the family members are arguing and appealing on how the assets are
to be distributed. The only winner in these cases are the lawyers.
Setting up a trust and a will is not
hard to do. Visit www.legalzoom.com or contact a local attorney who can help
you create these documents. The cost to create these documents are not
prohibitive.
As Alan Lakein Said, "Planning
is bringing the future into the present so that you can do something about it
now."
Over and Out,
T. Norman
