Do I need a will or living trust?

Edwards Finance > Wills

Q. Do I need a will or living trust? I keep hearing I need one, but I don't think so..... - My wife and I have no kids, and the home mortgage is in BOTH our names. - We are 30 and live in Michigan. - She is listed as the beneficiary of my 401K and IRA - I am am listed as the beneficiary of her 401K and IRA - Any liquid assets (bonds/stocks) are Joint w/ Rigths of survivorship. - We both have company cars, owned by our employers * Under these conditions, is a will or Living trust needed? * If either one of us died, wouldn't the other AUTOMATICALLY get the others assets?

A. -In my decidely non-expert opinion you need both. Not to be too morbid, but what if you both get wiped out in an accident? Who then inherits and how? There was a long thread about living trust here a couple of months ago, and I refer you to that. If it's expired, perhaps there's an archive for this group. (Moderator Susan?) The main purpose of the living trust is to avoid probate. It was very necessary when I set it up for my elderly mom as most investment accounts (she had hers in mutual funds) had no transfer-on-death provision (also avoiding probate) at that time. Now, many more do. Probate can be expensive and hold up distribution of the estate. Whether your estate could fall under simple probate is dependent upon your state. In California, the limit is $100,000 (exclusive, I believe, of assets in living trusts or tod accounts) for estates to avoid regular probate. Instead, the estate can fall under "simple probate" which really means no probate at all. I looked this up on California's web site under the probate code section, and I would strongly advise you not to accept opinion in this matter but do the same yourselves for Michigan. (Or, if you want to accept my opinion, you could move to California.) Another purpose the living trust can serve, as mentioned in one of the articles in the previous thread, is to specify what happens if you become legally incapacitated and the successor trustee takes over. The trust can specify how you want its assets to be utilized and dealt with. As usual, free advice (not that I'm offering this as advice) is often worth what you pay for it, so do your own due diligence. Btw, one way to handle things very simply and inexpensively is to get the Nolo Press software for wills and living trusts. This is what I did. But my lawyer good-guy cousins (they really are!) went to an attorney for their will, costing 50 times more, and I know many if not most of the professionals in this group will agree with that -A living trust is most often revocable, so that means it probably won't be shielded from estate tax off the top of my head, You might want a living trust: If you want to make provision for both dying in a common disaster If you'd like to avoid probate costs (being the beneficiary of 401 still subjects them to probate most places, which means fees and delays - unless they're invested in annuities) If you'd like to avoid having the joint assets automatically frozen upon one death

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