Making Sense Of Wills & Living Trusts

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

(KTVI) - Planning for what happens to your assets after you’re gone is a big piece of the financial planning puzzle. Yet there are many factors to consider, and many options to weed through. Bob Wamhoff, President of Wamhoff Financial Planning & Accounting, offers the pros and cons of two popular options – Wills and Living Trusts.

1.  What is a will?

  • A Last Will & Testament is a legal document stating WHERE your assets will go.
  • It takes effect upon your passing.
  • A will can appoint guardians for your dependent children.
  • A will must go through probate upon your passing, at which time wills are made public.
  • Depending on the complexity, it can cost $50 - $1500 to create

 2.  What is a living trust?

  • A living trust creates a legal entity that can hold assets and state not only WHERE, but also WHEN and HOW your assets will be distributed.
  • It takes effect the date it is signed.
  • A living trust does not replace a will, but works in conjunction with a special type of will called a “pour over will,” which often lists the living trust as the beneficiary.
  • If you have a living trust, you must be diligent about putting your assets in the trust.
  • A living trust can help your assets avoid probate, and can potentially reduce estate taxes.
  • Creating a living trust can be costly, at $300 - $5000 depending on the complexity.

 3.  Do I need a will or a living trust?

  • Consider the size of your estate and number of assets you have. If you have many assets, and many folks who will receive those assets, a living trust may be a good idea. If your estate is simple, a will may suffice.
  • Is your estate likely to be contested? If not, a will may serve you fine.
  • Do you have young beneficiaries? If so, you may want to hold their assets in trust.

The bottom line – do something. Don’t leave your assets to chance once you’re gone.

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.