“Tomorrow becomes never. No matter how small the task, take the first step now!” – Tim Ferriss
Have you thought about how your belongings and final wishes will be handled when you pass away? Perhaps a better question: Have you seen what happens to families when somebody passes away without a will or trust? My family learned first-hand how greed can tear a family apart; I want to help you avoid this fate which is why we met with Estate Planning Attorney Josh Bekerman who educated us on all of the following:
What is a Will?
A Will is a legal document listing your final wishes for your remains and belongings. For some people a Will is a way to make sure their loved ones are cared for the way they want. Jack Benny, a former US Comedian, designated money through his Will and Trust to deliver a red rose to his wife every day for the rest of her life. Some people want their money to go to a good cause such as how Leona Helmsley left $$ millions to care for dogs in need. Having a Will is an important first step in making sure your final wishes are carried out.
Wills are registered with the court and when you pass away your property goes through a process called probate. Having an attorney draft your will is important for two points:
1.) They verify the authenticity of the will
2.) They make sure the wording is legal and correct
What if you have a child or family member who will require special care when you pass away? Guardianship also requires a will.
What is a Trust?
According to Josh a Trust is similar to a will but enables your belongings and assets to bypass Probate, which is a process where the court takes control of your assets and then disperses them. There are a few different kinds of Trusts as well like a Special Needs Trusts that are designed to care for a person of special needs when you pass away. Trusts can also be a better way of avoiding creditors from seizing your assets.
Josh says the execution of a Trust is based on who you appoint to be in charge of it. It can be a family member or a corporate trustee like a bank or financial institution. They are independent and follow the directives of the trust. Corporate trustees usually make money on the trust by investing the trust money and taking a percentage as commission. Corporate trustees can be replaced with the proper provision so you can replace them if they are not performing for you; the expectation is they will work hard to get you the results you deserve since their commission is shared with yours.
How much does it cost to establish a Trust?
According to Josh the average cost can range from around $750 up to over $2,500 depending on the specifics of your case, as well as the commission your attorney is seeking. He also cautions the cost isn’t indicative of the value. Here are some great questions to ask an attorney to ‘feel them out’:
1.) How long has your attorney been practicing?
2.) Can they explain the difference between a Will and Trust?
Please share your comments, including if you would like help getting in touch with Josh to setup your Will or Trust!