Wills and trusts continue to dominate questions readers have for Personal Finance Q&A.
Question: What are the primary differences between a will and a trust? We should have drawn one up by now for our three kids, but keep delaying because we aren't sure which to do. Our primary concern is the care of our kids in case of some tragedy. Our only real asset is our small home. I'd appreciate your advice.
Answer: If your primary concern is to appoint a guardian of your children, you need to prepare and sign a will. Ask your proposed guardian if he or she is willing or able to serve. You will also need to designate an alternate guardian, as the person you nominate first may not be available to serve when called upon. Your will must be signed in the presence of two disinterested witnesses.
A living trust is designed to avoid the time and expense of going through probate. Probate is required whenever someone dies owning title to any real estate or has more than $100,000 of assets and accounts in his or her name only. Your home would trigger a probate, which could be avoided by placing the home's title into a living trust before you die.
However, if the home is in joint tenancy or community property with right of survivorship with your husband, it would not trigger a probate if one of you were to die. Instead, it would pass to the surviv- ing spouse by right of survivorship.
The home would only be subject to probate upon the second spouse's death or in the event of simultaneous death.
As a married couple with modest equity in your home and three minor children, you might consider the following: Make sure your home is titled in joint tenancy or community property with right of survivorship; execute an advance health-care directive (to spell out your wishes for health-care decision-making) and a durable powers of attorney for financial management (designating someone to handle your financial affairs should you become incapacitated); and complete a valid will.
Q: My 71-year-old husband is in ill health. I'm 68, our house is paid in full, and we have investments worth about $800,000. My question is whether we need a will or trust. My husband says we don't need either, because everything is listed in both names, with the survivor being the beneficiary. Is this true?
A: Technically, he is correct. If one of you dies first and the other survives, any "joint tenancy" or "community property with right of survivorship" accounts will pass to the surviving spouse.
A few rules are needed to help foster a feeling of community. We encourage a free and open exchange of ideas in a climate of mutual respect, but any post that violates someone's right to use and enjoy fresnobee.com is prohibited. Before you post, please read the terms of use and obey these simple guidelines.
Here are the ground rules:
Contents of this site are © Copyright The Fresno Bee. All rights reserved.
E-Mail
Print
@Nyx.CommentBody@