If you own any type of real estate, including a personal residence, have children, own a business, have a retirement account, or even life insurance you need a Trust! Sound bold? It’s not…Simply stated here’s why:
- Real estate – Even with a Will, if you don’t take proactive action you’re estate will end up in Probate Court in almost every State.
- Children – Are your children, young or old, able to handle any assets you leave them? It’s not just who’s going to raise minor children, can your older children handle the money dropped into their lap?
- Business – Who’s going to run your business if you pass away? Who can make deposits, pay bills, and sell assets?
- Retirement Account – Sure you can name a beneficiary inside your retirement account and avoid probate? But do you want them to get those funds all at once? Would it be better for them to receive some of those funds over time?
- Life Insurance – Could your beneficiaries handle a big life insurance payout? Also, what if your spouse remarries…do you have a plan for dropping a big life insurance policy into their lap? Any strings?
A Revocable Living Trust solves all of the concerns above and much, much more!
Millions of Americans die each year without any type of estate plan in place, and this forces their families into the probate court system. Here they experience huge expenses with lawyers, court fees, and significant time delays when they would rather be mourning. Worse yet, without a plan…the State law will implement a plan for the distribution of their assets.
However, a Revocable Living Trust allows ANY American to ‘write the law’, and design the outcome and distribution of their assets upon their passing the way they feel is best for their beneficiaries.
What is a Revocable Living Trust?
A Revocable Living Trust is a unique document that’s part of an overall Estate Plan. It accomplishes so many incredible objectives it’s difficult to even list all of them. Here are just a few:
- A Revocable Living Trust is a private document that isn’t filed with any State or the IRS. Moreover, more and more people are using a Trust with a unique or ambiguous name to hold their assets and create incredible privacy benefits while they are still alive.
- You can create provisions in a Revocable Living Trust for your minor children or children that act like minors, that are far more creative and extensive than a Will. Consider giving your children financial support when they reach certain benchmarks, goals, or even a specific age. You can even hold money back or impose penalties. If a child’s life isn’t in order or not to your liking, change your Trust. I know…a little narcissistic, but it’s your money! Read more here “Creative Trust Provisions for Your Children“.
- A Revocable Living Trust is administered by you during your life and by a Trustee that YOU choose upon your passing. This person, or company, will handle all of your assets the way YOU decide in advance. This can include what the Trustee invests in, when they sell assets, and when they distribute them to your beneficiaries.
- If you have children with special needs and worry about their care when you’re gone a Revocable Living Trust. A Trust can create a structure with ‘special needs provisions’ to properly handle their finances when you’re gone. The Trust will appoint a guardian and terms that allow for continued State and Federal care in addition to the assets or income from the Trust.
- Probate is a court process that can be extremely time-consuming and expensive. With a properly funded Revocable Living Trust you can avoid Probate entirely. A Revocable Living Trust is designed to allow your Successor Trustee to handle your affairs privately and without court involvement. However ‘funding the trust’ is the key! Read more here on “How to Fund Your Revocable Living Trust”.
- You can change your Trust any time you want while you’re alive. It’s a ‘Revocable’ Living Trust! If you get remarried, your kids tick you off, or you decide to completely restructure your entire estate, you can change your Trust however you want!
- Over 57% of American households have a dog and over 35% own a cat (But do you really own that cat? – a topic for another article I’m sure). The real question is ‘who’ will be taking care of that pet when you’re gone? A Revocable Living Trust allows you to appoint a guardian for your pets and set aside money for the caretaker and the animal themselves. See “Estate Planning for Your Pets“
Moreover, don’t think a Revocable Living Trust is just for rich or old people either. Consider just a few of the reasons listed above and realize that a revocable living trust is becoming more and more common for single AND married individuals, young or old, rich or poor, with or without children.
You’re not alone
You can create a plan where the people you trust and love run your affairs upon your passing. These same people can also be designated to help with your affairs if you become disabled. A Revocable Living Trust isn’t just there for you upon your passing, but also while you’re alive and need help.
I get it, nobody wants to think about dying, but being prepared for a disaster is important in every instance, AND dying with your assets disorganized could be just that: a disaster. In fact, more than 50 percent of Americans don’t even have a Will or any type of estate plan whatsoever.
So, is a Will the simple answer for everyone? Absolutely not. If you take a little extra time and money to implement a Revocable Living Trust as part of a coordinated estate plan, it could save your family tons of time and thousands of dollars down the road.
It’s not just all about the Revocable Living Trust either. This type of trust is a part of an overall coordinated “Estate Plan.” A quality Plan should include the following and a number of ancillary documents:
- Revocable Living Trust (the foundation of your Estate Plan)
- A Will (to ‘pour’ any personal property into the Trust).
- Powers of Attorney for Finances
- Powers of Attorney for Health Care (to decide on doctors or procedures – not to “pull the plug”)
- An Advance Medical Directive or Living Will (that’s the ‘pull the plug document’)
- Funeral and Burial Instructions
- A Directive for organ donation, final instructions, etc.
If you’re one of those millions of Americans that have put off your Estate Plan and are ready to get started putting your affairs in order, check out our Annual Estate Planning Special here.
Or if you just want to leave it to the courts, judges, fighting family members, and the blood-sucking lawyers (a quote from Jurassic Park), just keep doing what you’re doing.
However, we’re ready when you are to get started planning and implementing your Trifecta and Estate Plan. Give us a call at 435-586-9366 or check out the KKOS law firm here.
* To sign up for Mark’s weekly Free E-Newsletter and receive his Free E-Book “The Top 10 Tax Strategies for Every American” visit www.markjkohler.com.
Mark J. Kohler is a CPA, Attorney, and co-host of the Main Street Business Podcast and The Self-Directed IRA Podcast. Author of the “The Business Owner’s Guide to Financial Freedom- What Wall Street isn’t Telling You” and, “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions”. Mark is also a senior partner at the law firm of Kyler Kohler Ostermiller & Sorensen, LLP, and the accounting firm K&E CPAs, LLP.