Key Points:

• A will is essential to avoid probate issues.
• Trusts aren’t just for the wealthy; they protect assets.
• Use a state-knowledgeable lawyer and make them the trustee to prevent family disputes.
• Don’t make the same mistake, invest in stable income stocks like these two dividend legends today.

Douglas and Lee discuss the importance of having a will and possibly a trust as part of estate planning, emphasizing that this is crucial regardless of one’s wealth. They highlight that having a will prevents assets from being tied up in probate, which can be a lengthy and complicated process. Trusts are also beneficial, not just for the wealthy, and can ensure assets are managed according to one’s wishes after death. They stress the need for an estate planning attorney familiar with state laws, as these can vary significantly. Additionally, they advise clear communication with all involved parties and suggest appointing a lawyer as the trustee to avoid potential family disputes.

Transcript:

So Lee, you and I are at certainly an age, we’re past the age where we would be considering wills and trusts.

I’ve got a will. I was told by a tax attorney to set up a trust, even though, you know,

It apparently doesn’t have to do with, you don’t have to be super rich to have a trust.

No, not at all.

It basically has to do with taxes.

So you’re probably talking about people really more in their 50s when they start to look at this, maybe younger.

So day one, what are you looking for as you get ready to prepare your estate?

Well, the most important thing, and we’ve tried to stress this for years at 24-7 in posts that we’ve written,

That the worst thing you can possibly do, really at any juncture, especially even if you’re in your 40s, if you have a family, you have to have a will.

You have to, regardless of what your net worth is, regardless of what your total stock holdings, anything like that.

Because the main problem is if you die, husband or wife, whatever, if you die and there isn’t a will, it goes into probate.

And probate courts vary greatly from state to state.

And sometimes the rules are so onerous and so difficult to prove, you know, certain items like who deserves what.

It can stay locked in there for months, years.

And so that’s the main reason is to protect your assets in a will.

And then you can consider having a trust within that will, which a lot of people have done.

We did that in our will.

And I kind of focused it based upon, let’s say I pass away tomorrow.

Which sometimes my wife would wish would happen.

All of our assets would be split.

My half of the assets go into trust for her benefit until she dies.

And, of course, she gets the other half to do as she sees fit, but mine would be in trust to benefit her, everything it earned, until her death.

And then it would go to my son and his children.

After that, it goes to who it’s dedicated to from a philanthropic standpoint.

Right.

But I think people need to understand that the trust within a will is common.

Some people say, oh, that’s just for rich people.

No, not at all.

No, not at all.

And it’s no more expensive than having an estate planning attorney draw it up.

And most of it’s… most of the wills and everything you see, it’s kind of boilerplate stuff where they just file in your information.

Yeah.

And I think people need to understand that typically this is done by somebody who at a state level, the people, the attorneys for this are people who are familiar with the rules and regulations of this in your state.

Now, there’s some things that are the same every state.

You want to make sure that somebody understands state law when they do this.

Whether it applies or not, in your case, I can’t tell you.

But you don’t want somebody who just says, oh, I understand trusts in the states, but I don’t understand any of the state probate.

Because once again, I don’t think that we can push this hard enough.

It can take a long time.

It also is a great place for somebody to contest.

You know, if one of your children or somebody disagrees with it, as it goes into probate, it’s much easier for them to challenge this than if it’s in a trust.

Oh, absolutely.

And you really hit on it, Doug, with the state laws vary so much.

I mean, in the last five years or well, in the last 15 years, I’ve lived in three different states and we’ve had to adjust our will.

We’ve moved again, you know, recently, we’re going to have to adjust it again because Texas law is different than Louisiana.

Louisiana law is different from where I am in Mississippi now.

So we’ll have to readjust it again for just that reason, because the state laws vary so greatly.

Yeah.

So, you know, again, for everybody’s benefit, you’ve got to have a will.

Got to have a will.

And again, maybe when you’re 28 and not married, that’s not something you’re thinking about.

But let’s say you’re in late thirties and you have a couple of young ones and a wife and you and the wife are doing well.

You certainly don’t want anything to happen to make that go awry or going to probate, you know, when your wife and kids could be, you know, in a bad situation.

So get a will.

Tell the attorney you also want to establish a trust.

The attorney is obviously going to understand why.

And another piece of advice, because I’ve been through this, tell everybody who’s involved with this.

Right.

Children, anybody who’s mentioned in there at all.

Make sure everybody knows what’s in there.

All right.

So if there’s any conversation about it, it happens before you die and not after.

Absolutely.

Have your lawyer be your trustee.

Do not have one of your children be your trustee.

No.

Because what happens is, is that your lawyer just plays by the rules.

In the other case, the person may do the right thing, but the sibling may say, well, they made you the trustee, so you’re getting it.

You want to take all that off the table.

Get a lawyer, have the lawyer do the will, the trust, and have that lawyer be the trustee.

If you do those things, the chances that you do this well, if you do those things in that order, are very good.

Very good.

And it’s the most important thing you can do for your future.

Yeah.

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