A Will Versus A Trust
VIDEO TRANSCRIPTION – A will versus a trust is a very common question that we get in our office when clients come in here and we’re talking about tax strategy as well as exit strategy.
Hi, I’m Steven D. Cooper, also known as Coach Coop with Coopers Accounting Service because your financial freedom matters. If you’d to learn more great tax tips, download our popular financial guide at our website, yourfinancialfreedommatters.com or click on the link below this video.
A living trust is a legal document created during your lifetime to manage your assets. What do I mean by that? A living revocable trust gives you a chance to change, amend your legal documentation. Great examples of why we call them life-changing events.
You may get married, may have children, more than one, you may have grandchildren. You actually may have great-grandchildren. So the revocable trust allows you to make changes during your lifetime. Irrevocable trust. Well, that means the exact opposite. You set everything up and you cannot change it.
Why is this recommended? It is primarily recommended for clients who has children or people that they’re going to bequeath the estate to that may not be so financially astute and they just may run through the money. Within that irrevocable trust, we recommend for clients to set up a life insurance trust.
So a great example of that, if the home is going to be paid off, then the Life Insurance Trust is designed to pay the property taxes. Once again, we tried to give our clients a well-surrounded, holistic point of view of how to make these decisions.
With that being said and done, that is the main example that we give to our clients when it comes to the estate planning side of this. Now, let’s go through a will. If you have a trust, you’re also gonna have a will in there. So a will, last will of a testament is a legal document, how you want to disperse your property or assets who would manage it as well.
What I try to explain to my clients is this, a trust is like a upside down you. The will is a you. Your major assets belong in the trust. Your minor assets, it could be jewelry, could be clothes, it could be furniture, it could be cars, belong in the will. The last surviving spouse, it transfers and it goes back to the trust.
We give our clients a few good examples. If your children are underage, we recommend that you have someone from the wife’s side of the family and you have someone from the father’s side of the family. That way both families have equal say so in the rank of the children. We had a client and this is quite common. They have a son. At 18, he will get 25%.
Then, at 21, he’ll get 50%. Then when he became 25, he would inherit 100 % of his inheritance. So it all depends upon the children’s age, the children’s maturity as well too. But we here at Cooper’s Accounting Service just want to give you some examples of what we gave to our clients.
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Well, again, I’m Steven D. Cooper, also known as Coach Coop with Coopers Accounting Service. You definitely want to watch the next video that’s on the screen now. I’m going to share some really important financial tips that may affect you.
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