13: Estate Planning 101
What happens to your family if something happens to you? The first time I thought about that was when my wife was pregnant with our first daughter. Life changes when you have people who depend on you.
Here are the basics:
1) Everyone knows you need a will.
2) You need life insurance. For security, load up on term insurance but think about cash flow banking for long term wealth and estate planning purposes. If you want to learn more about this, I can refer you to someone good.
3) You need a living trust. This is the one that most people seem to not understand. If you die, your assets go into probate. That means even if you have a will, your assets stuck in court proceedings for about 2 years. Probate is also very expensive. Finally, imagine your family waiting 2 years to get what is rightfully theirs.
Attorneys who write up a will for you will often skip mention of a living trust? Why? Because they make a lot of money off of probate. That’s why their office numbers are written all over your will!
A living trust is relatively inexpensive and allows you to avoid probate all together. Your family gets access to your assets right away without getting the courts involved.
Finally, your life insurance policy ownership and beneficiary should be a living trust, NOT an individual. Most people do not know that death benefits are also subject to probate.
This stuff is boring to most people, but it is SO important that I hope you take action on this if you have not already.
If you have any questions, just reply to this email.