What's The Difference Between A Will And A Living Trust

What's the difference between a will and a living trust? In this video, we're going to talk exactly about those differences. A will is very different. It's not going to keep you out of probate. A living trust is going to keep you like, it'll be for generations. So stay to the end of the video. We're going to talk in detail, not only about these two, but why you must, must get a living trust and why your 18 year old kids need one too. So specifically, I'm going to talk about what is a living trust. I'm going to talk about what's a will. Specifically the difference between them. And I can tell you probate is a huge part of it. I mean, why would you ever build any wealth, even if it's only 50,000 or a hundred thousand, to give it to your state and then your federal government. And then specifically, we're going to talk about what happens with the living trust and the will when you die. And if you want generational wealth, you really don't have a choice. You have one thing to do. So in this video, specifically, we're going to talk about what is a living trust. We're going to talk about a will. We're going to talk about what's best for you and what happens if someone dies and you don't have any of this set up. Specifically though, I want you to stay to the end because I want you to hear an absolute horror story, a family that didn't do any of this and it took them 34 years to resolve. So stay tuned. We have a lot to talk about. I have my partner with me, Scott Arden. We own a company called Generational Wealth Solutions and that's what we do. Great solutions for generational wealth. Now, even if you're listening and you say, I don't have any yet. Well, if you go searching my channel for all sorts of insurance conversations, you're going to realize that you can have insurance. It can go to a trust and all of a sudden you can make your kids millionaires on one move. Not today's conversation, but that trust keeps you out of probate. So Scott, welcome. And let's start with what's a living trust. Oh, thank you. Yeah. So what a living trust is a comprehensive estate plan. It has multiple components in it and it's not just a little stack of documents. I mean, a living trust, if you see a true comprehensive estate plan, you'd be like, wow, this is, there's a lot of information in here, but all that information is what allows you to bypass the probate process. All right. So there are primary components of a living trust. That's the difference between a will and a trust is, you know, a will, we'll still go through probate. A trust will actually bypass the probate process. So the components of a living trust are your living will. So again, how are assets to be handled while you're alive? Then you have your last will and testament, which is basically, this is how I want my assets to be allocated upon my passing. It also talks about special bequests that you might make, you know, if you've got grandma's diamond ring, or there's a family heirloom that you want to go to a specific person. It clearly defines that within that last will and testament, but the last one testament also includes a pour over will. And this is one of the biggest things that a will does not have is if in the events, let's say you are forming a joint venture or you're purchasing a property and you haven't fully closed on the deal. A pour over will is designed to actually go out and capture those assets and bring them into the trust so that they bypass the probate process. Then there are the next component is your durable power of attorney for healthcare. So who is going to be appointed as your conservator? If you become incapacitated, who's going to be making the decision to either keep you on life support or enact the DNR order? Also, how are things to be handled? Do you want to be cremated? Do you want to be put in a burial plot? So on and so forth. So again, it clearly defines your wishes. But then there's also the additional things that the financial institutions are going to need and the banks and your insurance company and mortgage is the abstract of trust or certification of trust that basically clearly defines if I pass, this individual is appointed the person to be able to handle my financial affairs, to be able to make the decisions and direct my investments as necessary. So those are the real components of, like I said, a living trust or a comprehensive estate plan that a will does not offer. A will simply is your living will. This is how I'm going to deal with my assets while I'm alive. And your last will and testament to say, this is how my assets are going to be passed on. Talk about that will though. I mean, you know, Susie Orman did this huge PBS special and everybody had to go get a will and that was enough. I have a client in the Midwest who I still cannot, you know, I'm saying convince him, but have him understand a will's not enough. And then maybe speak to that license to seal because there's a lot of lawyers who for some ungodly reason are telling people that wills are enough. So I want you to dig deeper into why it's not enough. And then in that too, I know it's got a lot of questions in one. Well, a lot of times too, if they combine will, and I just thought about this and he also, we have to have a lot of insurance and that's going to handle it. Speak to how neither of those vehicles are going to handle it. Right. Yeah. So the will will go through the probate process. A lot of the, you know, the big thing out there is, Oh, it'll bypass it. No, it will not. It absolutely will not. If you just have a will, it will tie your estate up in the probate courts for typically it's one to two years in a lot of States, but States like California, New York, they can take upward of six years. And as we've experienced in the past, we've known people that their estate or their probate could take upward of 34 years, which again can create a lot of turmoil within the family. Yeah. It's just a nightmare. So with that, you know, again, the probate process is designed to essentially put your affairs out there saying, Hey, this person passed. And if you feel that you're entitled to the estate, whether that's a creditor, whether that's a second cousin removed from, you know, aunt Tina or whatever, right. It opens it up and it ties up all of the assets. It completely freezes the assets to where the family cannot handle any of the bills, cannot handle final expenses, things of that nature. It's all going to come out of pocket. So, yeah, I mean, I, I can go on and on, but really the whole reason why the promotion of was they're cheap. They're easy. They're going to encompass all of your assets, but what they're not telling you is in fact, it is going to go through the probate process. So talk about the fees than a probate court, like just to give someone a perspective because yeah, it might cost a little more to get the living trust and get it set. Right. And there's a little more complexity to it, but if you're going to do generational wealth and you want to just pass on what you have properly, it is the only way to go. So talk about the fees and probate, maybe people will have a little more wake up to look at this. Yeah, they're absolutely atrocious. So again, when probate happens at the federal government, the state and the probate attorneys, the probate attorneys typically take anywhere between five to 7% of the value of the estate. Then you've got the state coming in, taking their portion. And then the federal government coming in and taking their portion. So by the time everybody's done taking their portion or their pound of flesh, your left or your beneficiaries are left with a resulting value of anywhere between 45% of the value of the estate. So 50, 55% probate is typically what those fees look like. So again, if you're looking to have or create generational wealth and pass 100% of the value of your estate on, we need a living trust because it will bypass the probate process. Now, let me just clarify on that. The medical, the hospitals will notify the probate courts and they will open a probate case. There's going to be a hearing. But once you present the legal documents to the judge or the magistrate is when they're going to say, this is a comprehensive estate plan. We're going to go ahead and close the probate case. We're going to hand all of these legal documents to the trustee and the executor of the trust, therefore bypassing it 100%. Love that. Love that. So when someone dies, you just kind of went into that full explanation. The one thing I want to just talk about really real quick at the end is how do you decide when you're putting your living trust and will together? And this little extra bonus here at the end, who is your trustee and who's your executor? I think you and I are both in conversations. A lot of people say, well, who do I trust enough to do that? Any advice as people are doing that? Yeah, absolutely. I mean, that is one of the clients think about is who's really able to make some of those decisions. For instance, in the durable power of attorney, let's see, my son is the trustee. So it's somebody that it could be a sister, a brother, son, or a daughter. They can act as the trustee, might even be a best friend, a family friend from a long time. It could even be your CPA or a family attorney to act in those capacities. However, when it comes to making healthcare decisions, this is one of the biggest factors is you may choose somebody for your power of attorney for financial affairs, because you know that they have the financial acumen to be able to handle and invest your estate. However, when it comes to making life decisions for you, first off, on my durable power of attorney, my son is definitely not the durable power of attorney because he could never pull the plug on dear old debt. So what I've done is I've given that to one of my brothers who I know can actually handle that. We're great friends and obviously siblings, but I know he can make that decision where my son couldn't. So it's absolutely imperative to really think these things through so your family doesn't have to make those decisions. And again, it really affects everything. It does. As I said earlier, I mean, we have a client who's got a 34-year problem. And any of you that are either inheriting or going to give an inheritance to start generational wealth, which is what I'll be doing, please don't do the surprise basket, have it very well planned and very well organized. So not only does generational wealth solutions help you in the setting up of these documents, it helps really talk through all these situations. We do a lot of, I'd say family therapy is, if we had to put a banner on what we talk people through, talk about the things that nobody likes to talk about. So tough conversations. And it's the real ones. And so if you're enjoying this or want some other conversation, go to the comments below, put in the comments. And then at the end of our conversation, and then there's a whole thing to go subscribe and give you an application. And then those applications, Steve, when you're passing this onto the team, as we're setting up this done for you marketing, I want Scott, like you have to let Steve know when these applications come in that they don't get bogged in our system. I want them to duplicate it. So however we, because we'll get them obviously to put it in our database, but then we need to duplicate it right over to our new generational wealth one. So I'll talk to Steve on how we're going to get that system done, but we are launching this week, young man. Perfect. Awesome. Right. Cool. I know you got to run. I appreciate it. I do. Thank you. Talk to you soon. So before I go into the final, like what happens when you die and there's only one way to get generational wealth with Scott, I want you to subscribe to the channel. I'm here five days a week. I want you to click the notification button, share it with your family and friends, especially in this category, you're going to have to pick durable powers of attorney. You've got durable powers of attorney in health and medical. You've got like some big decisions to make. This is serious stuff. You want like your friends and family, the people that are going to like receive this legacy. They need to be on this channel too. So share it, comments, subscribe. This is really, I actually put this up the top, like five things that you need to learn about money. So let's stay connected. And for those of you that are serious, serious about learning this and not only learning it, putting it in your life, click on the link below. It's going to take you to a financial personality quiz. You're going to take the quiz takes about 30 seconds. That way I get to know who you are and where your issues are. I'm going to send you back a video, what to do about it. In addition, I'm going to give you an application to work with our team. Specifically, this application is going to go to Scott. The gentleman that has interviewed my partner, and he'll give you a very private one-on-one conversation about a will, living trust, and what you need to be doing next. So click on the link. Let's begin. I'll talk to you tomorrow.