The recent unveiling of Michael Jackson’s will has brought up a lot of questions about wills, trusts, and estate planning: Why is his will so short? Does this mean it doesn’t work? Where is all his money going?
And then there’s the statement that makes any estate planning attorney shudder:
I guess trusts and estate plans are just for the rich.
Nothing could be further from the truth. Trusts and estate plans are for everybody. First of all, an estate plan describes the documents that dispose of your assets after you are gone. This may include nothing but a will and a healthcare directive, or it may include those documents plus a living trust, powers of attorney, modified beneficiary designations on insurance policies, retirement plans, annuities, and more. The size and intricacy of your estate plan can be as small or as large as you wish. It all depends on you and your attorney.
Secondly, revocable living trusts are useful to everybody, from the asset-poor young parents just starting out to the wealthy grandmother with enough property to give a house to every grandchild. This is because revocable living trusts are private and versatile documents that can be created to accommodate your unique situation, whatever it may be.
Those asset-poor young parents like the privacy of a trust–the fact that they can nominate a trustee to take charge of their finances for their minor children without everybody knowing who it is. They can also use a trust to set money aside for their children’s college fund, if that is important to them; or keep the family money in a singe trust for the benefit of all their children until each one has reached a certain age, when the inheritance can be divided up equally. And they can do this even if their only asset is the small house they just bought, or possibly a low-cost term insurance policy.
The wealthy grandmother likes a trust because she can leave an inheritance to her daughter, but keep it out of the hands of her daughter’s untrustworthy husband; or she can set aside a sum of money for each grandchild, to be used specifically for education, not fast cars. And the trust can encompass as many bank accounts, investments, or pieces of real estate as she likes.
Trusts and estate plans are essential and useful tools, not just for the rich and famous, but for everybody. Contact our office to find out what kind of estate plan can benefit your family.