By Matt Osborn
Wills and Trusts Manager, Desert Financial Credit Union
If you’re closer to the retirement years than the just-starting-out years and haven’t established a will or trust, you’re not alone. However, doing so is easier than you think and comes with something priceless—peace of mind.
About 60% of people don’t have a will or trust. Refraining from planning ahead can wreak financial havoc for those who may have counted on those funds, not to mention create potential for family drama. Planning ahead can make it much easier for those left behind to cope with managing your affairs.
It can seem overwhelming—daunting even—and so often people put off establishing a will or trust until it’s too late. Most of us aren’t versed in the intricacies of estate planning. And often we don’t want to think about our departures, inevitable as they are.
Often there is a perception that only attorneys can work on wills and trusts and that the cost is too high. But neither are true. A certified legal document preparer (CLDP) can deliver the services. Attorneys who specialize in estate planning can help with more complex needs or high-net value assets, but for most, CLDPs can provide the expertise you need and service you want.
Avoiding making that call is understandable. But one conversation with an expert and you’ll gain a better understanding of the importance of taking this step if you’re 10 to 15 years from retirement or if you’ve already reached that stage. Planning for what happens next for your spouse, loved ones or charitable causes you care about can help you feel more in control.
Wills vs. trusts
In simple terms, a will is a legal document, signed by two witnesses, that establishes your wishes and goes into effect as soon as you pass on. A will appoints who will receive your assets and which representative has been named to carry out your wishes. It can work well for some, but upon your death, a will may need to be filed into a court process called probate. An attorney may have to help navigate the process to ensure your wishes are met, and the record is public.
A trust, however, goes into effect as soon as it is established and can be controlled by you during your lifetime. A revocable trust means you can make changes anytime. It is a legal arrangement through which one person you appoint (or institution such as a law firm or bank), called the “trustee,” manages the legal titles to assets for another person, called a “beneficiary”—usually children or loved ones, charitable organizations or other heirs.
Trust goes on after you pass away, and assets can be controlled and distributed by the trustee. A trust does not require court approval and stays private.
Bear this in mind: A will can avoid probate if all assets, such as bank accounts, investments, life insurance policies, etc., are set up with named beneficiaries. A trust can avoid probate if everything is titled properly to the trust. A will and trust both might require probate if assets are not set up properly. It’s why consulting with an expert to thoroughly investigate your needs and help you understand your specific circumstances is so important.
Many clients like these make that first call because they’re already members at Desert Financial Credit Union, and we can help anyone who lives in Arizona.
When searching for any provider, look for a trusted, certified and reputable name. The ideal candidate can deliver a one-stop shop that makes the process easy, including electronic storage. At Desert Financial we take pride in educating our clients about the options so they have the information and resources they need to make sound decisions.
What’s most important is working with someone you connect with and trust to help carry out your wishes for a smooth transfer of assets.
You’ve worked long and hard to build a life you can be proud of. Make the time to carefully plan how the fruits of your labor can go on to make a continued impact. Taking care of your loved ones and/or making a legacy gift to a charitable organization adds meaning and value to your life.