Maintaining Control of Your Money From Beyond the Grave

A funny  story, found on littlethings.com, about a man and his money goes as follows:

There was a man who worked all of his life and saved all of his money. He loved money more than just about anything, and just before he died, he said to his wife, “Now listen, when I die I want you to take all my money and place it in the casket with me. Because I want to take all my money to the afterlife.” So, he got his wife to promise him with all her heart that when he died she would put all the money in the casket with him. When one day he died. Just before the undertakers got ready to close the casket, the wife said, “Wait a minute!” She had a shoebox with her, she came over with the box and placed it in the casket. Then the undertakers locked the casket and rolled it away. Her friend said, “I hope you weren’t crazy enough to put all that money in there with that stingy old man.” She said, “Yes, I promised.” The friend replied, “You mean to tell me you put every cent of his money in the casket with him?” The wife answered, “I sure did. I got it all together, put it into my account and I wrote him a check.”

Enter laughing emoticon.

Despite the intended humor, this story touches upon an important estate planning issue – many people have very poor plans in place with little instructions. When that occurs, you basically give up all power or control over your assets when you pass away.

Is there a way for you to maintain some control over your assets after you’re gone? Answer: Yes. Enter the trust.

A trust enables you (the grantor) to give control of your assets to a trust instrument (e.g., account), which is administered by a “trustee” for the benefit of beneficiary’s that you specifically designate. Trusts are a fantastic estate planning tool that offer flexibility and give you more control over what happens to your money when you join the afterlife.

There are different ways to establish a trust. For example, you can set up a “living trust” while you’re alive so you can actually control the distribution of your estate. You transfer ownership of your assets into the trust and can even serve as the trustee. Though, if you name yourself as the trustee, you will need to name a successor trustee to distribute the assets after you pass on.

There are numerous advantages to establishing a trust. When properly drafted and executed, a trust enables you to avoid probate because the trust instrument owns your assets. This means whomever you designate as trustee will have authority to distribute the trust assets. You can name a close friend, business colleague, financial advisor, or even an institution, to manage your trust.

You can also include investment instructions for your children so you decrease the risk that they mismanage any assets. Additionally, since the assets are owned by the trust, it provides a level of protection in case one of your children gets divorced, if your spouse re-marries and subsequently gets divorced, and helps protect your assets from creditors.

For more information on how to properly set up a trust, contact your estate planning attorney and schedule a time to sit down and talk with them about your estate.