The other 68% leave it to their state to manage their estate and distribute their assets. IMHO, this is a risky proposition. The state will put the estate in probate, assign an administrator, assign a guardian if needed, and follow intestate rules. This may be a costly, lengthy (due to conflicts with potential heirs), and different from the wishes of the decedent.
Even if one has a will a trust, it needs to reviewed periodically to ensure it still current and follows one wishes. Changes such as births, deaths, divorce, marriage, child becoming adult will affect wills and trusts. Also, circumstances may change who one chooses to be executor, trustee, or guardian. Typically, it is recommended to review about every five years, to determine if laws or circumstances have changed.
A trust does require extra effort of titling assets in the name of the trust to be effective. For example, a house has to owned by the John Doe Trust, not just John Doe. However, a good estate plan will have a pour over will, which transfers assets to the trust before probate, and therefore, avoids probate.
Finally, I've noticed that trusts have become much more complex in the past few years given the changes in estate laws on exemptions from income tax. IMHO, having a attorney at a larger estate planning law firm to account for all the latest nuances/changes is worth doing.
For more on Strategies and Plans, check back every Monday for a new segment.
This is not financial nor estate planning advice. Please consult a professional advisor.
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