How to Bulletproof Yourself from Lawsuits and Medical
Bankruptcy
Most
people think they have enough time to plan for the dispersion of their assets
and estate later in life, but the sad reality is that people can become bed
ridden or pass away without a moment’s notice. Because of the morbid reality of
the entire topic, many people will wait until after retirement or even after
their children have left the nest before they even think about writing a will
or deciding how to hand over their belongings when they are no longer alive.
Trusts and Wills
Both
trusts and wills can be utilized to help distribute your assets and belongings
at the time of your death. However, it’s best to understand both options and
decide which route will be the best in your personal situation.
Trusts
The
main difference between a trust and a will is that your property won’t go
through the probate process when you die, meaning that the beneficiaries won’t
need the court system to determine the legalities of the will. During probate,
much of the estate is taxed and also feeds attorneys’ fees. Attorneys and
financial advisers can help with professional advice when creating a trust and
do-it-yourself kits are also available, but make sure you cover all parts of
the document before submitting.
Wills
A
will is a legal document that helps to map out where and to whom your property
and other personal items will be distributed to at the time of your death. The
executor of the will is the person who will designate that your wishes are
followed through. A will is subject to probate proceedings and provides court
supervision for handling any beneficiary challenges and creditor disputes.
Wills also become public record at the time of your death, so if this is a
concern, you may want to look into other options. The cost of a will is much
more affordable, but probate proceedings can be incredibly substantial. If your
children are still minors at the time of your death, a will allows for you to
nominate a guardian to be responsible for your child.
Living Trusts
Unlike
a will, a living trust can start benefiting you while you’re still alive. A
living trust is established during your lifetime and is revocable, meaning you
can make changes to it as needed. You can transfer all or most of your property
into the living trust throughout your lifetime and any excluded assets can be
transferred into the trust when you die through a pour-over will. Like other
options, a living trust is used to manage your property before and after your
death and also determines how those assets and the income earned are
distributed at the time of your passing.
If
you become disabled or incapacitated, a successor trustee will be able to
manage your financial affairs. One of the best reasons to opt for a living
trust is that it’s not subject to probate and all provisions of the trust will
remain private. This type of trust will cost more to prepare, manage and fund,
but avoids all of the probate costs if all of the assets were held by the trust.
written by Brad Richdale copyright 2010 all rights reserved
blog founded by Bradford Richdale
written by Brad Richdale copyright 2010 all rights reserved
blog founded by Bradford Richdale
