The Simplicity (and genius!) of Designated Beneficiaries On Your Accounts!
If you don't even have a will... do this!
I have shared with you my new obsession with all things related to estate planning, wills, trusts, probate, and the like.
This broad topic fits squarely into the "Wealth" category because it transfers, and therefore can create, protect, or sabotage wealth for surviving family members, heirs, and beneficiaries after a death.
On that note, I want to make a brief introduction into an estate planning topic that I will cover more deeply in a future blog post.
I've mentioned this topic before: Revocable Living Trusts.
Please, stay with me, stay with me!
You may THINK trusts only relate to "other people" with vast portfolios of real estate, Swiss bank accounts, shell corporations, and royalty agreements with shady people like Scooter Braun...Hear me out, though: Revocable Listing Trusts are to wills what a Swiss Army knife is to a fixed blade steak knife.
Whereas a will can...
Designate to whom your assets go...
Name guardians for kids and pets...
Specify your funeral wishes...
Incur probate and the time and expense that comes along with it.
A trust can...
Not only name the beneficiaries, but also state when, over what time period, for what specific purposes funds or assets may be used...
Avoid probate because assets are "owned" by the trust rather than you personally...
Maintain your privacy after death, as trusts are not public information like wills are.
Imagine a scenario in which both parents die unexpectedly, leaving two minor children, a house, a 6-figure life insurance benefit, and a sailboat.
Which is more ideal:
A) With a WILL: The assets and cash are held by a custodian until the kids reach adulthood, then it's all delivered to them in one lump sum. (Wondering how young people generally do with giant paydays? Just Google: Bankruptcy rate of professional athletes).
Or...
B) With a TRUST: The assets are managed by a trustee and distributed for specific things at specific times like college, a first home, marriage, etc. with no single "Big Fat Payday!" befalling the child longgg before conventional wisdom would suggest they are ready for it.
Sufficiently unnerved? I'll be sharing more about the power and relative affordability of trusts in the near future.
*** HOT TIP ***
Wills versus Trusts aside, if you know you need to take SOME meaningful action that will get you moving in the right estate planning direction, do this:
Make a list of all your:
Checking accounts
Savings accounts
Pension plans
IRA's
401(k)'s
HSA's
Life Insurance Policies
Annuities
Brokerage / Investment accounts with a "POD" or "TOD" (transfer on death) designation
Jointly owned assets
Then, pick one a day, one a week...
whatever you can achieve, and set the primary and a contingent beneficiary for each.
You'll need each beneficiary's name, social security number, phone, email, and mailing address.
Heck, set your interval timer for 30 minutes and GET IT DONE! ;)
