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Should You Have A Will Or A Living Trust?

Should You Have A Will Or A Living Trust?

Estate planning can be confusing. You have a multitude of options for how your assets should be handled in the event of your death. While a will is a route most people take for directing their assets after death, there are times where having a living trust is more beneficial.

What is a Will?

A will is a legal document. It contains a plan regarding the distribution of your assets should you pass away. Essentially, it allows you to have some final input into how your estate should be managed, even if you cannot make the said changes yourself.

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Your will includes a designated executor. An executor is a person you select to help distribute your assets as set forth in your will. The executor has no say in regards to the management of your assets until your death. Upon your death, your estate goes through probate. During these court proceedings, your assets are distributed according to the executor’s instructions as the representative of your will.

What is a Living Trust?

A living trust is also a legal document that places all of your assets into a trust. The trust functions, with you designated as the trustee, until your death or a point where you become mentally incapacitated.

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Prior to your death, you have full rights to manage the assets held in the trust as you see fit, conversely you are not the legal owner of the items. Instead, the trust is the legal owner. You simply maintain the legal right to manage the assets that the trust owns. Instead of designating an executor to manage the distribution of your assets, you select a successor trustee to assume control of the trust should you no longer be able to manage the assets.

Which is Right for You?

To help you decide which option is right for you, there are a few considerations that need to be made. According to Steve Bliss, a probate and estate planning attorney, one benefit of using a living will is it can keep everything out of Probate Court.

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Ordinarily, your trustee successor is allowed to take immediate control of the trust should you become incapacitated, or if you pass away. This allows assets to be distributed more quickly, as court proceedings are not necessary. Nevertheless, a living trust can also help you maintain a level of privacy. As part of probate proceedings, your will is submitted to the court to open probate. At that point, your will becomes public record. This means that it can be read by anyone who requests it, allowing them to verify what you left and to whom you left it. Trust documents can only be viewed by beneficiaries or heirs, depending on the laws governing the process in each state. Accordingly, the only way the information becomes public record is if a lawsuit is filed regarding the document’s validity.

While a will only takes effect upon your death, a living trust can be enacted should you become incapable of managing the trust. Notwithstanding, this can include instances of mental illness, as well as medical conditions that render you unable to manage the assets, such as a prolonged coma. While the assets within the trust would not be distributed until your actual death, the successor trustee can take over the management of the assets immediately.

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Does Having a Living Trust Mean You Don’t Need a Will?

Whether you would need a will and a living trust depends on a few variables. For example, if you own other assets that are not put into the trust, you may want a will to manage how those are distributed upon your death.

Additionally, many states require that issues regarding the custody of any children to be addressed in a will, and not a living trust.

How to Decide

Consequently, the best option for you may be simple or you may find it challenging. When in doubt, seek out the assistance of a legal professional who specializes in the area of estate planning and probate.

Moreover, this can allow you to ask questions regarding your specific situation and determine which path works best to meet your needs.

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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