Recently by Bill Rounds: Ignore The Police!
We Are All Going To Die!…Someday
When we die the court system will take control of our financial lives and make one of the most private aspects of our lives public. This loss of financial privacy will happen unless we take one simple step to protect ourselves, our assets and our families with a living trust.
Probate is the Problem With Financial Privacy
When people die they leave behind some stuff (hopefully). Most people have a will, if they have anything at all, to determine who gets all of their neat stuff. To administer this process, for people who do or do not have a will, the courts take control of all the assets, make sure all the money goes to the right people, and make your will a part of the public record. This is called probate. Anyone particularly interested in learning what your kids got will be able to find out very easily. Some courts even make the information available online. This is a huge blow to financial privacy.
Living Trust
The only way to avoid having so much of your private financial life displayed for the public is to prepare a living trust. A living trust allows you to maintain control over your assets while you are alive, avoids the public probate process to distribute assets when you die and maintains your financial privacy.
There are some other great benefits as well. Compared to the cost of administering a living trust, probate is expensive. The cost is based on the value of the assets that the probate court deals with, so the more money you have, the more it will cost you. Probate is also slower.
Don’t Get Hit By A Bus
What happens in the unfortunate event that you are hit by a bus and turned into a vegetable? Whether or not you have a will, your assets are going to sit around and can’t be touched. They can’t be used to pay your medical expenses, they can’t be used to pay your mortgage, they can’t be used to pay for the groceries of your stalwart spouse. This can pose a very bad problem when assets exist to pay those costs, but you are incapacitated, covered in bandages and unable to get at those assets.
With a living trust, the unfortunate bus incident will not leave your assets untouchable until you die. The trustee can use the assets to pay for expenses while you are still alive but unable to manage your own affairs. This makes sure that the family members who are diligently at your hospital bed side can pay for the things they need, hopefully balloons and get well cards.
Living Trusts Are Common
The cost of having a basic living trust prepared is relative to its complexity. If your financial situation is simple, they can be quite inexpensive. If your financial situation is more complex, it will be worth the cost and effort to draft an adequate living trust. Many attorneys are able to prepare them and make sure they are properly funded.
Conclusion
The legal system still contains several tools that help ordinary individuals protect their financial privacy. Having a living will is one of the great ways to take advantage of that system. Living wills provide a private alternative, to public indignity. Check out the book How To Vanish for more legal tools to help protect your privacy.
Reprinted with permission from How to Vanish.
Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.
