Your Mom and I have been attending classes on “Wills and Trusts”. It is a four week class and this our second time scheduling the same subject. We don’t learn very fast.
I have learned a few things!
If you don’t set up a Will or Marriage Agreement, the State (in our case, Wisconsin) gets to decide who is entitled to your assets. Andrews Rule No.1 is “Don’t let the State decide dispersal of your assets”. Letting a governmental agency decide anything these days is insanity. It is called avoiding Probate.
It is also very clear that the world of Wills, Trusts, and Financial Management (needed for Wills and Trusts) is very complex. It can be overwhelming. Lawyers tend to spew forth all the legal options you have and then profess to understand financial issues as they pertain to law. Andrews Rule No.2 is “No one is an absolute expert on giving advice on your personal situation”. The changing of tax laws, governmental mandates and unpredictable financial markets make the world of Wills and Trusts extremely complex.
The “average” person will be depending more retirement plans provided by employers for their primary source of money during retirement. “Qualified Plan” is the official name for 401(k)s, 403(b)s, and IRA’s. Almost everyone has a plan. It is tax deferred money. Before you can use your deferred money, you must pay the taxes on all monies withdrawn. The government will get their “due”. Listen closely! Because your “retirement plan” is your biggest asset as you get old, managing how it gets dispersed if you die is very important. As I understand it, the people you name to receive your “deferred” money after you die and how you refer to the “deferred accounts” in your Will or Trust is critical. So Andrews Rule No.3 is “manage your deferred retirement accounts so that they get dispersed the way you want when you die” Do not let the government decide the fate of deferred accounts.
I know this is boring sh–. Nobody feels they have enough money to worry about. We don’t think we are going to die today. Paying a lawyer to draft Wills and Trusts costs money. Besides, the sink is clogged up and you have other priorities.
Do not put it off. Do a Will or a Marriage Agreement. Do it now. You’ll be glad you did. It gives you the power to decide how anything accumulated in your life gets dispersed.
Love,
Dad