We receive a lot of questions on these topics so we brought in an expert. Today we discuss wills, trusts, and estate planning with Tyler.
This is a big topic so we brought in a member of the LMM Community Forums who deals with this for a living. Tyler and is estate planner and a lawyer in the military.
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Put simply, estate planning is deciding where you want your stuff to go when you die or are incapacitated.
Do you need a will? Probably. Do you need a will if you have a kid? Absolutely. You can’t count on the state or sometimes even family, to carry out your wishes.
An asset that doesn’t have a next owner listed, some checking accounts for example, has to be assigned by a probate judge. A non-probate asset, like a life insurance policy or some brokerage accounts, bypass the process and are paid out pretty quickly.
If you die in debt, creditor’s get first crack at your estate. But your family will not be held responsible for that debt unless they have co-signed for the debt.
A living trust can help to take some of the burden off your family when you die. It takes some of the work and hassle out of the probate process.
Power of attorney gives someone else the power to make financial decisions for you. They can handle things like paying your bills. Health care power of attorney allows someone to make medical decisions for you.
You can leave money in a trust and set the parameters under which it will be distributed. Tyler recommends age, the age of 30 as the parameter.
Having a big life event is a good time to check in with your estate planner to find out if you should update your will.
You can have a will drafted for between $400-1500. A trust is more expensive because they’re more complex.
This topic brings up things that none of us like to think about but making sure that your family is taken care of is worth it.
Estate Planning: A Primer: Tyler’s in depth article on the subject.
Featured Image Photo Credit: “Fountain pen nib” by Ben FrantzDale