Finally . . . You quit stalling and started saving
The Covid-19 pandemic pushed you to put a little money aside. You set up an automatic bank transfer, depositing $50 monthly into an emergency fund. You opened an IRA (Individual Retirement Account) and arranged for another $100 a month to go directly from your paycheck or savings account into your IRA.
Then, of course, you started to worry about passing your life’s savings on to your kids. Afterall, there’s so much to fret about today . . . like succumbing to Covid-19. Family and friends only confuse you by telling you that you might need a trust to leave your money to your heirs after you die.
What is a trust? A trust is a document that describes how money and other assets should be distributed at the time of your passing. Unlike a will, a trust is a private matter, rather than a probate proceeding. A trust isn’t subject to public announcements that could lead to someone contesting your wishes, as occasionally happens with wills. Trusts don’t go through probate court where attorney fees and other costs can eat up a lot of what you wanted to go to your children or other heirs.
Do you need a trust? You probably don’t need a trust if your only assets are accounts with beneficiaries, such as bank accounts, IRAs, insurance policies, etc. However, any other properties you own where you cannot name beneficiaries, such as homes, collections or cars, end up in probate court upon your demise.
What goes into a trust? A trust, usually drawn up by an attorney or launched by yourself on an online legal site, itemizes any other assets you want to pass on to your heirs, including: homes, businesses, buildings, vehicles, art work, antiques, furniture, patents, trademarks, etc. A trust also includes other features associated with wills, such as who should care for minor children if both parents die, or which life-saving steps you want to be taken before you are declared dead.
A trust allows you to manage your assets both during and after your lifetime. If you choose a revocable trust, you can alter your choices as your life changes. A trust can be especially helpful for people with special circumstances, such as care of disabled children, succession of a business, rights to income from books or inventions, charitable giving, tax reduction and so on. With a trust, you can also set certain conditions to be met, such as ages of children when the transfer of assets takes place. You can choose your own successor trustees, or pick the persons you want to manage your trust after you’re gone.
Before scheduling a visit with an attorney, or going online to develop your own trust, make a list of all your assets with no named beneficiaries. Add to your trust document everything you want to pass on. Then, explain how each item should be distributed by the trustees that you designated for the job.
Manage Your Money . . . financial facts for a brighter future provided by Advancd Asset Management LLC
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