Profitt Report: The differences between a will and a trust
August is national Make-a-Will Month. While it’s not most people’s favorite topic, it’s an important document to consider. A survey by Caring.com finds more than half of adults don’t have a will.
“It’s one of those situations or topics that no one wants to talk about,” said Mindy McIntosh of McIntosh and Associates in Freeland.
However, without an end-of-life conversation, your assets might not go where you want them to.
“Your family and loved ones are not able to make those decisions just because they're your family,” McIntosh said.
One option, McIntosh explained, is a will. You use this to name who will receive your property when you die and they’re fairly easy and inexpensive to set up.
“In this area they are a couple hundred dollars, not too bad, you can set money aside for that,” she said.
Once you die, the will passes through probate, meaning a court oversees the process and it’s public. Another option is a trust. It’s private, you avoid court and it can be used to distribute property while you’re alive or when you’re gone.
“So if you leave everything to your children, they can decide who receives it, when they receive it,” McIntosh said.
Though a trust is more complicated and expensive to set up.
“You’re into several thousands of dollars to do that and then updates from that,” McIntosh said.
However, you cannot name guardians for your kids in a trust and you can in a will. This isn’t an either/or situation: you can have both a will and a trust. That’s why it’s important to do your research and talk to an expert about the best plan for you.
“Then also the loved ones don’t feel so burdened or what would they really want? Now they know it's already on paper it's what's going to happen,” McIntosh said.
Another piece to the puzzle: figure out your durable power of attorney and advanced healthcare directive. This will name someone to manage your money and your medical decisions if you’re incapacitated.
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