A trust is basically a contract that lives on after you die. It includes things like a living will (a will that says when you want your family to pull life support) and power of attorney for when you get old and can't make your own decisions. Obviously, we don't need those things for a long time. It also includes your will, but a will can be disputed in court. If it's part of a trust, it can't. The big deciding factor for us though is that it's a guarantee that if we die when our kids are minors, they will be raised the way we want. We could put their guardians in a will, but anyone could come to court and dispute that and possibly win. We want to be very specific with who will take our kids. In a trust, it's also easier to dictate who will handle the life insurance money and HOW it will be used. If you leave everything to your kids in a simple will, as soon as they turn 18, they get all the life insurance money they are entitled to. I don't know about you, but I don't want any 18yo getting $500,000. With a trust, you can specify. For example,
18-24 years old the child will have the expenses of college, a wedding, and a mission covered. They can get a job and work for whatever else they need.
The child gets a third of their inheritance at 24, 27, and finally 30.
That's not ours, we haven't set it up yet, it's just the example given at the presentation.
Anyway, it's boring and lame, but if you're like me and there would be a lot of people fighting over your kids or you want to make sure your kids spend their money wisely, it might be something to look into.
That's awesome, Allie. It's definitely something I've been thinking about a lot. I really don't think we'd have the same kinds of kid/money tiffs you guys would...I think Luke would just go to my parents, since they're 10 years younger than Scott's, but he does have adult siblings with families and kids of their own now. Hmm. Definitely something we should keep talking about. Oh, and I don't think it's too early to specify your wishes on DNR orders (Do Not Resuscitate, or when to pull the plug), since that can happen in the blink of an eye in a car accident. (Apparently it's more common than you'd think, since the only way you can be an organ donor is if you die on life support.) Ugh. So morbid. Anyway, seriously. How much does it cost to set up a trust? Are we talking like 60 bucks or like $1800?
ReplyDeleteYeah, wanting our kids to go with specific people was a big concern of ours that a lot of you might not need to worry about. But, knowing that if we die, our kids won't turn 18 and then suddenly have $500,000 at their disposal is nice too. I mean, I was a good 18yo, but I can't imagine how foolish I would have been with all that money. Instead, their college, weddings, missions, and health insurance will be paid for and they will get their money in installments.
ReplyDeleteWe'll be doing the living will and medical poa just to get it done. I put my sister Jessica (18 last Septemeber) in charge of my medical decisions (if Corey is unable to be) since she'll be a nurse and will likely be alive as long as me, but she was weirded out :).
This guy gives a big discount to people who come to the presentation he does, because that's 90 minutes of 1 on 1 time he doesn't have to spend with us. We are paying $650. It's a big chunk of change, but to just get a normal will professionally done costs at least $500, so it seemed worth it. We were the youngest people by FAR at the presentation, but it makes sense to do this now while our kids are young. I mean, if we didn't do it and died at 87 years old and our kids don't get their full inheritance or something, that would be too bad, but whatever. But, if we die now and our kids go to the wrong person or blow all their life insurance money on stupid things at 18, that's a way bigger deal. Anyway, just one more boring adult thing to think about.