Ep 57: What You Should Know About Wills and Trusts

Home 9 Podcast 9 Ep 57: What You Should Know About Wills and Trusts

The Concept:

Let’s talk about estate planning, specifically wills and trusts. Find out what’s right for you, how much it costs and more.

The Reality of the Matter:

People often overlook the estate planning side of preparing for retirement. There are a lot of misunderstandings about trusts and wills and the roles they play in the equation.

On this episode of the Retirement Reality Podcast, Mike Kojonen explores some of the critical questions you should ask as you prepare for retirement.

“Every adult needs to know about this,” said Mike.

You review your health and life insurance every year and do upkeep on your house. You need to take care of your estate plan, too. It’s not a set-it-and-forget-it type plan. You should review your will and/or trust every few years.

So should you get a will or trust or both? First, let’s define what they are. A will says who gets what when you die and is pretty simple and straightforward. A trust is more complex and lays out who gets what, when they get it and how they get it. It gives you more control over your assets.

If you do neither, the state will decide who gets your assets when you die.

“Most people believe, ‘I did a will. That’s good enough.’ But you have to understand the limitations of what a will is,” said Mike.

A will is basically a legal document with your wants and wishes. But a trust actually owns your assets and is held privately, meaning it doesn’t have to go through the probate system.

A common misconception is that you need to have a lot of money to do a trust. That’s not true.

“The whole purpose of a trust is to make things simple for the people you’re leaving your assets behind to,” said Mike.

A will costs, on average, about $800 to $1,200 to set up. A trust costs, on average, about $2,500 to $3,000 but will save you money on the backend.

Listen to the full podcast to hear more about wills and trusts and find out how a financial adviser can help you. Use the timestamps below to find a specific segment, including a mailbag question from a listener.

2:10 – Getting to know you question

5:39 – Why estate planning is so important

7:19 – Will or trust?

10:41 – You don’t need a lot of assets for a trust

14:14 – What does it cost to set up will vs. trust

16:40 – Financial adviser’s role

18:30 – Mailbag: Should I give my son this inheritance?

Thanks for checking out the Retirement Reality Podcast. We’ll talk to you again next week.

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