What will happen to your assets when you die?

In the same vein of our recent "news you can use" articles on umbrella insurance and the TreasuryDirect program, today we focus on two important (and under-utilized) estate planning tools: wills and living trusts.

Wills and living trusts make sense for those who are married, have children, own real estate, have financial or other material assets, and/or wish to influence how their estate is distributed after their death. I'm guessing the vast majority of folks reading this fall into at least one of these categories.

Yes, this is morbid territory to tread into. But it's important.

A few months ago, right after I published What Really Matters, a good friend died suddenly of a heart attack at age 42. There was no warning. He was a former college athlete, still-fit, and died on the basketball court during his weekly practice. He left behind a wife and three children, one with life-long special needs.

Fortunately, my friend was a lawyer, and had practiced what he preached professionally. He had put a well-constructed estate plan in place while alive (along with a healthy life insurance policy).

I saw first-hand the great benefits this gave his family upon his sudden passing. They were able to fully focus on dealing with their grief, as the estate plan largely took care of all the legal and financial details in the background.

If you've had an immediate family member or close friend pass away, you're likely aware of the tremendous number of tasks and decisions that need to be dealt with when someone dies. Aside from the obvious treatment of their remains and funerary arrangements, the deceased's estate needs to be settled.

This means an executor needs to be appointed who will manage the process, creditors need to be paid as will any estate taxes, heirs need to be identified and assets distributed among them (which in many cases requires selling/disposition of these assets first), care for minor children needs to be arranged, etc. This process is oftentimes managed by the state (i.e., slowly and often inefficiently).

This is an awful lot to put a surviving spouse through (assuming there is one) during a time of extreme grief. The same goes for children.

And this burden gets compounded if there's no estate plan in place. What assets did the deceased own? Where are they? Whom did he/she want to inherit them? All of these questions need to be answered during the estate settlement process.

Imagine trying to untangle all this right after your spouse, parent, sibling or friend has died. When you're already emotionally traumatized.

Now imagine that the heirs involved don't agree on how the estate should be divided, and infighting ensues. Relationships can easily get permanently damaged and money quickly drained should expensive lawyers get involved to contest the matter. The situation often gets very ugly, very quickly. (Click here for a sampling of horror stories resulting from when folks died without a will.)

Why risk putting your loved ones through this? Especially when it's so easily avoidable, and relatively inexpensive to do so?

Look, every one of us is going to die. That's the only rock-solid guarantee we're given during our time on Earth.

You've worked hard your whole life to take care of those important to you. Don't drop the ball on the 1-yard line. Take care of them in your death, too.

Wills & Living Trusts

The bedrock of a good estate plan involves a will and a living trust. I'll explain the role of each, the differences between the two, and the wisdom of having both.

NOTE: What follows is a summarization. While wills and living trusts are fairly simple conceptually, there are lots of special cases. Many of those are not addressed below so as not to prevent this article from becoming densely encyclopedic. Also, I am not a lawyer -- meaning: take this synopsis as education, not personal legal advice. If you want that, consult an estate lawyer.

OK, with that out of the way, let's proceed.

Will

Most folks are familiar with the concept of a will. Every murder mystery usually has a scene where the family gathers at the lawyer's office to hear the reading of the late victim's will: "Being of sound mind, I hereby bequeath to my nephew, Chauncey, my collection of rare Amazonian butterflies..."

Simply put, a will is a legal document that specifies:

  • how you want your assets distributed upon your death,
  • whom you grant the power to oversee that distribution (i.e., your "executor"), and
  • whom you want to have guardianship of your minor children, should there be any

Sounds like something every responsible adult should have, right? I agree.

But amazingly, 63% of US adults do not have a will. And an additional 9% have a will that's no longer up to date. Even among the more affluent, 45% do not have a will.

So those ugly issues I mentioned above of what can happen when you die without a will? They're very real and actually happen a lot.

Which is criminal, as a will is a straightforward document that shouldn't cost you more than a few hundred dollars (at most) and a few days to create (I'll give more specifics on the will creation process in Part 2). There really aren't any good reasons why the vast majority of us, especially those with minor children, shouldn't have one.

The key downside to note with a will is that it's subject to probate. Probate is the judicial process that determines the validity of the deceased's will. None of the instructions laid out in your will can be undertaken until a court accepts its validity and "grants probate" to your specified executor.

Probate isn't much fun. It takes time: typically a few months, but it can last years in certain cases. It can be costly: expect to pay somewhere between 3-8% of your estate's assets in combined attorney, court and other fees.

Probate can be challenging for real estate, especially investment properties. Until these assets have passed probate, your heirs (including your spouse) cannot manage or dispose of them. They're locked in limbo, which can get quite inconvenient if the probate period stretches for many months or years.

It's also a public process. During the probate period, your will is made available upon request to anyone who asks for it. So the details of your estate and your disposition wishes are not kept private. And your will can be challenged in court during this time by anyone who feels they have a valid claim on your assets.

Which brings us to Living Trusts...

Living Trusts

A trust is a legal arrangement in which one or more people manage or take care of property for someone else's benefit.

There are several major benefits you can enjoy by placing your assets into a trust to manage them while you're alive (that's why it's called a "living" trust). One of them is avoiding probate upon your death.

Once your assets have been placed inside a living trust, they're managed by its Trustees on behalf of clearly-specified Beneficiaries. So with ownership transfer, executorship and distribution are already worked out -- the probate court doesn't need to get involved.

For most couples, this allows the surviving partner to retain seamless control of all Trust assets after the other dies. The assets don't go through the probate process, there are far less fees involved, and the process is private. (The estate still can be contested, though. But the details of the estate's assets don't have to be made available to the public upon request.)

Avoiding probate is just one of the advantages offered by living trusts.

Another big one is (potentially) reducing estate taxes. I'll spare you the wonky details for now, but there are ways for your trust to take advantage of deductions and credits that may materially reduce the estate tax liability on your wealth after you and/or your surviving spouse die. Any estate lawyer or tax accountant worth their salt can walk you through the details.

Your living trust will also enable you to control how your assets flow to your heirs. If you have minor children, most states won't let them own property directly while they're 17 or younger. And if you're passing along a substantial amount of wealth, giving it to all to them at age 18 in a lump sum is a bad idea (unless you want the inheritance squandered in an epic blast of debauchery).

Via your trust, you can specify how you want your assets (and any associated income from them) to be meted out to each heir over time -- based on age milestones, financial need, use (e.g., education), mental competency, or any other conditions important to you.

Similarly, a living trust is helpful in keeping your assets managed the way you want should you become incapacitated (i.e., still living, but not able to mentally or physically manage your affairs). For many of us, living too long may become the bigger risk to our estate vs dying too soon.

Last, the most common form of living Trust is amendable throughout your life. You can change it at anytime, as often as you like. Or you can dissolve it altogether. The bottom line is, you're in full control over everything while you're alive (and mentally competent).

Getting Started

OK, as a refresher:

  • A will is a good idea for pretty much everyone. But it's especially important for people with minor children. A trust does not specify legal guardianship in the event of your death. Only a will does that.
  • A living trust makes sense for anyone with assets and heirs (especially your spouse) they want to pass their wealth along to. Some experts say living trusts make sense if you expect your estate to be worth over $150,000; others go as low as $20,000.

The cost to set these up is pretty trivial compared to the huge benefits they can offer your loved ones. A will costs a few hundred bucks (or less) to set up and can be completed in a matter of days (or less). A living trust will range between several hundred and a few thousand dollars, depending on how sizable/complicated your estate is.

In Part 2: A Primer On The Essentials For Your Will & Living Trust, we walk through in detail the principal legal elements that your will and living trust should address. This includes specific clauses your documents should contain (unless advised otherwise by a professional), as well as helpful context for the most common decisions folks will face when creating/updating these legal vehicles.

If you don't yet have a will and/or a living trust, or it's been a while since you've reviewed the ones you have, read on. Your loved ones will be glad you did.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

Terry Trobiani owns Gianelli's Drive Thru in Prairie Grove, Illinois, where he put up a row of American flags for the Fourth of July. But the city claimed he was displaying two of them improperly and issued him a $100 ticket for each flag.

Terry joined Glenn Beck on the radio program Tuesday to explain what he believes really happened. He told Glenn that, according to city ordinance, the American flag is considered "ornamental" and should therefore have been permitted on a federal holiday. But the city has now classified the flag as a "sign."

"Apparently, the village of Prairie Grove has classified the American flag as a sign and they've taken away the symbol of the American flag," Terry said. "So, as a sign, it falls under their temporary sign ordinance, which prohibits any flying, or any positioning of signs on your property — and now this includes the American flag. [...] The only way I could fly the American flag on my property is if I put it on a permanent 20 to 30-foot flagpole, which they have to permit."

Terry went on to explain how the city is now demanding an apology for his actions, and all after more than a year of small-business crushing COVID restrictions and government mandates.

"COVID was tough," Terry stated. "You know, we're in the restaurant business. COVID was tough on us. We succeeded. We made it through. We cut a lot of things, but we never cut an employee. We paid all our employees. I didn't take a paycheck for a year just to keep our employees on, because it was that important to me to keep things going. And, you know, you fight for a year, and you beat a pandemic, and then you have this little municipality with five trustees and a president, who just have no respect for small businesses. And right now, what I see is they have no respect for the republic and the United States ... I think it's terrible. The direction that government, at all levels, have taken us to this point, it's despicable."

Watch the video below to catch more of the conversation:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

The Biden administration is now doing everything it can to censor what it has decided is COVID-19 "misinformation." But Glenn Beck isn't confident that the silencing of voices will stop there.

Yeonmi Park grew up in North Korea, where there is no freedom of speech, and she joined Glenn to warn that America must not let this freedom go.

"Whenever authoritarianism rises, the first thing they go after is freedom of speech," she said.

Watch the video clip below from "The Glenn Beck Podcast" or find the full episode with Yeonmi Park here:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution, and live the American dream.

Most self-proclaimed Marxists know very little about Marxism. Some of them have all the buzzwords memorized. They talk about the exploits of labor. They talk about the slavery of capitalist society and the alienation caused by capital. They talk about the evils of power and domination.

But they don't actually believe what they say. Or else they wouldn't be such violent hypocrites. And we're not being dramatic when we say "violent."

For them, Marxism is a political tool that they use to degrade and annoy their political enemies.

They don't actually care about the working class.

Another important thing to remember about Marxists is that they talk about how they want to defend the working class, but they don't actually understand the working class. They definitely don't realize that the working class is composed mostly of so many of the people they hate. Because, here's the thing, they don't actually care about the working class. Or the middle class. They wouldn't have the slightest clue how to actually work, not the way we do. For them, work involves ranting about how work and labor are evil.

Ironically, if their communist utopia actually arrived, they would be the first ones against the wall. Because they have nothing to offer except dissent. They have no practical use and no real connection to reality.

Again ironically, they are the ultimate proof of the success of capitalism. The fact that they can freely call for its demise, in tweets that they send from their capitalistic iPhones, is proof that capitalism affords them tremendous luxuries.

Their specialty is complaining. They are fanatics of a religion that is endlessly cynical.

They sneer at Christianity for promising Heaven in exchange for good deeds on earth — which is a terrible description of Christianity, but it's what they actually believe — and at the same time they criticize Christianity for promising a utopia, they give their unconditional devotion to a religion that promises a utopia.

They are fanatics of a religion that is endlessly cynical.

They think capitalism has turned us into machines. Which is a bad interpretation of Marx's concept of the General Intellect, the idea that humans are the ones who create machines, so humans, not God, are the creators.

They think that the only way to achieve the perfect society is by radically changing and even destroying the current society. It's what they mean when they say things about the "status quo" and "hegemony" and the "established order." They believe that the system is broken and the way to fix it is to destroy, destroy, destroy.

Critical race theory actually takes it a step farther. It tells us that the racist system can never be changed. That racism is the original sin that white people can never overcome. Of course, critical race theorists suggest "alternative institutions," but these "alternative institutions" are basically the same as the ones we have now, only less effective and actually racist.

Marx's violent revolution never happened. Or at least it never succeeded. Marx's followers have had to take a different approach. And now, we are living through the Revolution of Constant Whining.

This post is part of a series on critical race theory. Read the full series here.

Americans are losing faith in our justice system and the idea that legal consequences are applied equally — even to powerful elites in office.

Rep. Devin Nunes (R-CA) joined Glenn Beck on the radio program to detail what he believes will come next with the Durham investigation, which hopefully will provide answers to the Obama FBI's alleged attempts to sabotage former President Donald Trump and his campaign years ago.

Rep. Nunes and Glenn assert that we know Trump did NOT collude with Russia, and that several members of the FBI possibly committed huge abuses of power. So, when will we see justice?

Watch the video clip below:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.