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If you will, allow us to present the hypothetical case of Pete Moneywise, a married, 78-year-old father of three who wants to get his financial affairs in order before his passing.<\/p>\n
Though he exists only within the confines of this article, his situation reflects what countless people of retirement age face as they draft their wills and create their trusts.<\/p>\n
\u201cI hate probate,\u201d Pete tells us in an exclusive interview. (What else did you expect? We created him.) \u201cI went through it when my father died, and my family spent the next year talking to lawyers, trying to get things squared away.\u201d<\/p>\n
He shares how the probate process caused tension between his siblings. He also harbored frustration over one unanswerable question: \u201cWhy didn\u2019t Dad create a living trust? It would\u2019ve made things so much simpler.\u201d<\/p>\n
Credit Pete for now following his own advice. He has set up a living trust. Now, he must decide what, if anything, to leave out of it. He has done the homework for you: Here are five things to consider as you structure your living trust.<\/p>\n
Back to living trusts and the reasons they\u2019re better than a long and drawn-out probate process.<\/p>\n
Unfortunately, many folks don\u2019t even know what \u201cprobate\u201d means until they\u2019re in the thick of it.<\/p>\n
Sometimes, not always, when a person dies \u2014 even if they left a will \u2014 a legal process called probate ensues. Probate is required to validate the will, name an executor to administer the estate if there isn\u2019t one, pay off liabilities, and then distribute the remaining assets to heirs.<\/p>\n
The process can take years, requiring piles of paperwork and ongoing legal fees.<\/p>\n
For instance, after Ozzy Osbourne passed away in July, reports began surfacing that his $220 million estate would face hefty inheritance taxes and a lengthy probate process. According to estate planning attorney Gideon Alper at Alper Law, \u201cIf Ozzy\u2019s assets were left in trust, his family could inherit faster and privately.\u201d<\/p>\n
In Pete\u2019s case, a trust could have helped his family avoid probate, protect their privacy, and minimize estate taxes when his father died. A trust is a document that allows you to keep control of your money and property and designate who receives it once you die.<\/p>\n
Before we get into living trusts, it\u2019s worth looking at an even simpler way to help your children live more comfortably after you pass.<\/p>\n
Life insurance can be a faster and smoother way to ensure your loved ones are financially protected when that happens. But not all life insurance policies are made equal \u2014 so make sure you find one from a provider you trust, with premiums and payouts that align with your financial objectives.<\/p>\n
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For instance, Ethos<\/a> offers term life insurance, is rated \u201cExcellent\u201d on Trustpilot, and has an A+ rating from the Better Business Bureau (BBB). Ethos offers simple and affordable coverage for a set period of time \u2014 typically between 10 and 30 years.<\/p>\n As a licensed third-party insurance administrator, Ethos has joined forces with some of the industry\u2019s top insurance carriers, such as Banner Life, TruStage Financial, and Ameritas Life Insurance.<\/p>\n You can get coverage in just 10 minutes online<\/a> or by phone, and guaranteed approval even if you have pre-existing health conditions. Even better, rates can start at just $9.80 per month.<\/p>\n Ethos also gives you the flexibility to select coverage amounts ranging from $2,000 to $100,000<\/a>, depending on your needs, so you know exactly what you\u2019re getting. And unlike the waiting time you might expect through probate, life insurance is typically paid out within weeks or months \u2014 not years. That means your children get support sooner rather than later.<\/p>\n Clearly, even wealthy individuals like Ozzy Osbourne can get it wrong. That\u2019s why it\u2019s important that Pete meets with a qualified and regulated financial professional to make sure he\u2019s not making mistakes with his estate planning.<\/p>\n High earners might consider working with the tax experts and legacy planning experts at Range<\/a>. They offer white-glove financial services to high-income households, helping heirs minimize estate taxes while avoiding probate.<\/p>\n Range offers help with a wide range of estate planning services, including wills, trusts, power of attorney documentation, and even advanced health care directives stating your wishes for medical treatment.<\/p>\n When you work with Range, you work with Certified Financial Planners (CFPs) who are legally required to put your interests first. Their advisors will evaluate your existing estate plan documents to ensure they meet your current needs \u2014 and help coordinate drafting basic estate plans if needed.<\/p>\n And the best part? You can book a complimentary demo<\/a> to see if Range can meet your comprehensive financial needs.<\/p>\n ## Five items to leave out of a revocable living trust<\/p>\n Vehicles. Whether it\u2019s a 1963 Corvette, a Harley chopper or a prop plane, all that\u2019s required to pass it on is a simple written instruction to transfer the title to a beneficiary. Meanwhile, if it\u2019s held in a trust, you could be vulnerable to lawsuits over accidents involving the vehicle.<\/p>\n Annuities and retirement accounts. A trust can turn non-taxed accounts into taxable ones. However, you can \u200bmake the trust itself the beneficiary, so that these accounts pass directly to your trustees without an IRS agent crashing the wake.<\/p>\n When it comes to non-taxed retirement accounts, make sure your money is being put to work in the background. For instance, you could invest in precious metals through a gold IRA with Thor Metals<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against inflation and economic uncertainties.<\/p>\n