You're never going to die. But should your life ever turn into a cartoon and an Acme anvil drops out of the sky, this section will help prepare you for what happens to the people and stuff you leave behind.
This boring but important word is the legal process that happens after you die. It's long, costly, and annoying for people in the land of the living.
It includes the following steps:
- proving the validity of your will (if you have one),
- identifying, inventorying, and appraising your stuff,
- paying what you owe people (debts and taxes), and
- distributing whatever stuff you leave behind.
Adding colored stickers to your best china and cuckoo clock may help divvy up stuff between your kids, but lawyers prefer wills and trusts to simplify and shorten the probate process.
You could eliminate probate by not having children, accumulating wealth, or buying material goods, but then you couldn't make your friends on Facebook envious.
A will is a tall, dashing British prince who went off the market to wed an annoyingly thin and stylish commoner.
A will is also a legal document that details how you want your stuff disposed of, and your children cared for, after you die. If you have stuff and/or loved ones, get a will.
If you die without a will, everything usually goes to your spouse and/or children. If you have no relatives, the state absorbs your estate - which finally makes the "Uncle" in Uncle Sam make sense. If you're single, with no children, the state decides which family member gets your estate.
A trust is an arrangement in which one person (the trustee) holds and manages property, money, and other assets for the benefit of another person (the beneficiary).
A living trust is funded while you're alive. Living trusts are good if you:
- want to minimize inheritance costs and delays,
- anticipate health issues, or
- have minor children (Teenage heiresses never turn out well.)
An innocent trust is an arrangement where Charlie Brown believes that Lucy will hold a football long enough for him to kick it from beneath her finger.
When should I get a will or a trust?
Assuming you're mentally competent, you can write a will any time after the age of 18. Most people get one after one of the following life events:
- Getting married
- Having children
- Major illness
If you move to a different state, you may need to have your will updated.
Where do I get one?
If your finances are simple and your estate is modest, you can craft a basic and inexpensive will using an Internet legal document service. Otherwise, hire an attorney to draw up a will for you.
How much will it cost?
Drawing up a basic will yourself with the help of an online legal document provider can run you less than a few hundred bucks.
If you use an attorney to draw up a will or trust for you, expect to pay hundreds of dollars per hour for his or her time. The bill could be thousands of dollars, but a well-designed will and/or trust can more than pay for itself by reducing taxes and probate costs.
After a run of bad luck with his investment portfolio (a chinchilla farm plagued by nits, some Franklin Mint coins that never seemed to appreciate in value, and of course, the Oklahoma City Ocean View condo situation), Bert realized that get-rich-quick schemes don't always work out as advertised.
Since education and hard work are so yesterday, Bert set his heart on marrying a beautiful woman for her money.
A week later, Bert received the email he had waited for his entire life: A super-wealthy Nigerian princess asked for his hand in marriage (along with a small wire transfer of USD 10,000). It was fate.
To find out how this beautiful love story ends, read the dramatic conclusion in our topic on investing.