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Authors: Suze Orman
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states where you want your assets to go after your death; with a revocable living trust, you take the steps while you are alive to sign the title of your property over to the trust.
By the way, anytime you want to you can amend the trust, so you can always change your mind about who gets what. Think of a trust as a suitcase, into which you put the title to your house, your stocks, and your other investments. For each item, you can affix a label, saying who will get it after you die. You carry the suitcase with you while you are alive, and you’re perfectly free to put new things in, take anything out, or change the labels. Then, upon your death, the suitcase gets handed by your successor trustee directly to your beneficiaries, at which time they can take out whatever you’ve labeled as theirs.
In many, many cases—especially in states with statutory probate fees—trusts are far superior to wills. Clients who came to me for financial advice, whether they were single, married, or living together, ended up with a thorough education on trusts.
As we just said in Nancy’s case, if you die leaving a will, in all states the only way for property valued at more than $100,000 (or at as little as $10,000, in some states) to be transferred from the name of the deceased to the name of the beneficiary is to have a judge do it through the probate courts. With a trust you save time and you avoid probate fees and legal fees. If Nancy had a trust instead of a will, and had specified where she wanted the house to go, the house would have gone directly to Jeff. There would have been no probate fee of $15,000, no courts, and no attorneys. Nancy’s wishes would have been carried out smoothly, and Jeff would at least have been allowed to grieve in his own home in peace.
If you own property or other assets, have children, or care about what happens to the people you love after you’re gone, I urge you to look into a trust. When? As soon as possible. There is a fair bit of paperwork involved in switching assets into a trust, so the sooner you’ve set one up, the easier it will be to accumulate assets in the name of the trust.
SARAH AND ANNIE’S STORY
Where you want your money to go is one concern. Where you
don’t
want it to go is just as important.
ANNIE: Ever since Daddy died, it’s been a nightmare.
SARAH: My husband, Harry, fought with Peter, our son, for years, and always said he wouldn’t get another dime. We hadto give him money so many times; over the years, that was tens of thousands of dollars. The worst thing was when Harry died, Peter didn’t even come to his funeral, couldn’t be bothered. I will never forgive him for that. I decided then: that was that. I wouldn’t let him have another dime, just like Harry said. Last year I moved here from Florida to live near Annie, my daughter, and my grandson, William. I trust Annie, she never wanted a thing. Peter is living in our house in Florida and wants it put in his name. No way. He can live there, but nothing more. Not one penny.
ANNIE: Mama kept all the money in a brokerage account in Florida. Daddy liked the person who handled it, so she thought, Why not just leave it there? What did we know? Daddy always took care of everything, so when we would get these statements from Florida, we just filed them away. Mama hardly goes out on her own anymore because she’s afraid she’ll trip and fall. But she loves to cook. Most nights William and I go over, and she makes us a great dinner. One night when we got there she was waving this power of attorney form around that Peter had sent her, and she was having a fit.
SARAH: I’m getting older, yes, but not senile, as you can see. Peter is trying everything to get his hands on my money. Can you imagine? He sends this note that says, “Mama, just sign here.” Power of attorney. If anyone is going to take over for me, I want it to be Annie. I trust her with my life. I just want him to leave me alone. And when I die, I want the
By the way, anytime you want to you can amend the trust, so you can always change your mind about who gets what. Think of a trust as a suitcase, into which you put the title to your house, your stocks, and your other investments. For each item, you can affix a label, saying who will get it after you die. You carry the suitcase with you while you are alive, and you’re perfectly free to put new things in, take anything out, or change the labels. Then, upon your death, the suitcase gets handed by your successor trustee directly to your beneficiaries, at which time they can take out whatever you’ve labeled as theirs.
In many, many cases—especially in states with statutory probate fees—trusts are far superior to wills. Clients who came to me for financial advice, whether they were single, married, or living together, ended up with a thorough education on trusts.
As we just said in Nancy’s case, if you die leaving a will, in all states the only way for property valued at more than $100,000 (or at as little as $10,000, in some states) to be transferred from the name of the deceased to the name of the beneficiary is to have a judge do it through the probate courts. With a trust you save time and you avoid probate fees and legal fees. If Nancy had a trust instead of a will, and had specified where she wanted the house to go, the house would have gone directly to Jeff. There would have been no probate fee of $15,000, no courts, and no attorneys. Nancy’s wishes would have been carried out smoothly, and Jeff would at least have been allowed to grieve in his own home in peace.
If you own property or other assets, have children, or care about what happens to the people you love after you’re gone, I urge you to look into a trust. When? As soon as possible. There is a fair bit of paperwork involved in switching assets into a trust, so the sooner you’ve set one up, the easier it will be to accumulate assets in the name of the trust.
SARAH AND ANNIE’S STORY
Where you want your money to go is one concern. Where you
don’t
want it to go is just as important.
ANNIE: Ever since Daddy died, it’s been a nightmare.
SARAH: My husband, Harry, fought with Peter, our son, for years, and always said he wouldn’t get another dime. We hadto give him money so many times; over the years, that was tens of thousands of dollars. The worst thing was when Harry died, Peter didn’t even come to his funeral, couldn’t be bothered. I will never forgive him for that. I decided then: that was that. I wouldn’t let him have another dime, just like Harry said. Last year I moved here from Florida to live near Annie, my daughter, and my grandson, William. I trust Annie, she never wanted a thing. Peter is living in our house in Florida and wants it put in his name. No way. He can live there, but nothing more. Not one penny.
ANNIE: Mama kept all the money in a brokerage account in Florida. Daddy liked the person who handled it, so she thought, Why not just leave it there? What did we know? Daddy always took care of everything, so when we would get these statements from Florida, we just filed them away. Mama hardly goes out on her own anymore because she’s afraid she’ll trip and fall. But she loves to cook. Most nights William and I go over, and she makes us a great dinner. One night when we got there she was waving this power of attorney form around that Peter had sent her, and she was having a fit.
SARAH: I’m getting older, yes, but not senile, as you can see. Peter is trying everything to get his hands on my money. Can you imagine? He sends this note that says, “Mama, just sign here.” Power of attorney. If anyone is going to take over for me, I want it to be Annie. I trust her with my life. I just want him to leave me alone. And when I die, I want the
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