Ask Terry Questions Will or trust?

Will or trust?

By Terry Savage on January 21, 2025 | Financial Planning / Retirement

If we have a will that states all of our assets are to be split between our three daughters and all of our life insurance and IRA accounts including Roth are divided this way, do I need a trust. Is our home included in the assets, or will it need to go through probate? As you know there is way too much information and opinions out there. We also need to start our RMD this year. How does that affect our social security?
Thank You.

Terry Says

Whew, you need overall financial planning advice, so first step is a fee-only FIDUCIARY advisor.
Start that search here: https://www.terrysavage.com/pam-krueger-wealthramp/

That advisor will direct you to an estate planning attorney. But first watch this video explaining the difference between a RLT and a will.
https://www.terrysavage.com/wp-content/uploads/2022/10/Terry-Talks-Wills-Trusts-Estate-Planning.mp4

In short, a revocable living trust is far preferable. Without it:
Your house — that depends on how it is titled. If currently joint tenancy with rights of survivorship, your spouse will inherit. If both die simultaneously, it will be part of your probate estate.

Also, if you have a stroke, for example, a RLT allows your named successor to act on your behalf without going to court (ie your spouse could sell the house, and use proceeds for your nursing care). In either case, you and your spouse should have healthcare power of attorneys and living wills (end of life instructions).

Accounts with named beneficiaries — IRAs, insurance — do not go through probate, so that is not a consideration. But all other assets would have to go through probate, a time consuming and costly process — depending on the amount of your assets.
Either way, you should have updated documentation.

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