If you want to help your children bypass a will after your death, here are 5 assets to help you avoid a living trust

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If I may, allow us to introduce the hypothetical case of Pete Moneywise, a married 78-year-old father of three who wants to get his financial affairs in order before he passes away.

Although he exists only for the purposes of this article, his situation reflects what countless people of retirement age face as they draw up their wills and set up their trusts.

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“I hate wills,” Pete tells us in an exclusive interview (what else did you expect? We made one). “I went through it when my father died and my family spent the next year talking to lawyers, trying to work things out.”

He talks about how the probate process caused tension between his siblings. He also harbored frustration over one unanswered question: “Why didn’t Dad create a living trust? It would make everything a lot easier.”

Thanks to Pete for taking his own advice. He created a living trust. Now he must decide what should be excluded from this process. He’s done your homework for you: here are five things to consider when structuring your living trust.

Explanation of the will: it is better not to go there

Many people don’t even know what the word “will” means until they’re in the thick of it.

Sometimes, but not always, when a person dies—even if they left a will—a legal process is required to prove the will, appoint an executor to administer the estate if there is not one already, pay off the liabilities, and then distribute the will. remaining assets.

Sometimes this process can take years, not to mention the mountain of paperwork and legal fees. For example, when beloved artist Prince died in 2016, the legal battle over his estate continued until August 2022.

If you’re of “sound mind and body” then you can make a will – and it’s a good idea to avoid leaving your friends and family scrambling to guess your wishes. With Trust & Will, an online service that makes it easy to create, store, edit and share wills, you can make the process as painless as possible.

Trust & Will is an organization aiming to turn this story around by providing helpful, concise and humane support for making wills and estate plans. They want to make estate planning simple, accessible, and accessible to all Americans, which means you can make sure your loved ones know, understand, and have input into exactly what your plan is before you commit to it.

If you want an extra level of security and peace of mind, you can create a revocable living trust. The trust would help Pete’s family avoid probate, protect their privacy, and minimize estate taxes after his father’s death. A trust is a document that allows you to maintain control over your money and assets and determine who receives them after your death.

“Revocable” means you can change the terms at any time while you are alive. Because the assets are not considered part of your estate, they bypass the probate process.

It also allows you to continue to use the assets placed in the trust, such as property or investments that you own.

If you have a large estate with many investments, you may want to consider consolidating the management of your assets into a single platform and using that platform to manage the distribution of your wealth after your passing.

Arta Finance is a digital wealth management service where users can access exclusive public market financial strategies and alternative investments to diversify their portfolios.

In partnership with Camelot Trust, Arta Finance also offers estate planning advice to help protect estates and ensure proper asset management.

However, the benefits of trusts have their limits, and some things can only cause headaches if kept there.

Read more: 82% of Americans don’t have a savings account that pays 10 times the national average.

Five Things to Leave Out of a Revocable Living Trust

Vehicles. Whether it’s a 1963 Corvette, a Harley helicopter, or a propeller plane, all that’s required to transfer it is a simple written instruction to transfer title to a beneficiary. If it is held in trust, you may be exposed to lawsuits due to accidents involving the vehicle.

Annuities and retirement accounts. The trust can convert tax-free accounts into taxable accounts. However, you can make the trust itself a beneficiary so that these accounts pass directly to your trustees, without any disruption from an IRS agent.

One way to ensure that the money in your retirement accounts grows at a steady rate and gives your beneficiaries what they deserve is to invest in a gold IRA with American Hartford Gold, a precious metals dealer that offers support with starting an IRA and direct investing. purchase of precious metals and coins.

Gold has historically acted as a hedge against inflation and is considered by many to be a safer place to invest their retirement fund.

Life insurance. There is no need to put it in a revocable trust. Simply name your beneficiaries on the policy. Or create an irrevocable life insurance trust (ILIT) to avoid estate taxes.

If you are concerned about your loved ones accessing funds to cover your funeral costs or other expenses and debts immediately after your death, life insurance can offer a one-stop solution that will help support your family by providing coverage that potentially replaces lost income or pay off outstanding debts in the event of your death.

Choosing term life insurance through a provider like Ethos ensures that your loved ones are protected from unexpected expenses as they age. With term life insurance, you can provide affordable coverage while managing your other financial responsibilities.

Ethos offers a simple online process that allows you to obtain up to $2 million in coverage for 10 to 30 years. To get a free quote, simply answer a few questions about yourself. You can then compare different policies and choose the one that best suits your needs.

Assets located in other countries. This gets more complicated because you may not be allowed to place international assets into the trust. To find out if this is possible, you will need to consult with a real estate attorney licensed in the country where your international assets are located.

Checking and savings accounts. If you use them to pay your monthly bills, you may find yourself in financial difficulty unless you are the trustee and have been given full control of the trust assets. There is a much simpler way: keep these accounts from being trusted.

And if Pete were real, he would probably remind you that the information in this article does not constitute legal advice. Before making any decisions, talk with a trust lawyer in your state, a financial advisor or other professional. Pete’s imaginary children—and your real ones—will thank you.

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This article provides information only and should not be construed as advice. It is provided without any warranty.