Show #388 Airing Sunday 5/20/07
If you're like most people, your number-one concern is to protect your family. That includes making sure that the inheritance you've worked so hard to build will be completely secure for your spouse, your children, your grandchildren, and your other loved ones.
You may think you've taken care of everything by making a will. Many years ago, a will probably was enough. But let me be perfectly clear: those days are over. If you use a will to pass assets to your heirs, you've condemned your family to months, sometimes years, of paperwork, fees, and costs, by forcing your estate into probate court. That's one key reason why is not the answer.
Now, you can avoid probate. We've talked on the show about the 3 most common tools: joint ownership, beneficiary designations, and revocable living trusts. These all avoid probate. But here's the big surprise: none of these tools adequately protects your family.
Let me tell you just one real-life story. Susan loved her daughter, Diana. And when she died, she left her home and savings to Diana.
Diana was deeply appreciative, because money was tight. Her husband, Rob, was just starting work as an attorney, and she had quit her job after the birth of their first child.
Just as Rob's career was starting to take off, he surprised Diana by moving out and filing for a divorce. Diana's surprise later turned to shock when the judge decreed that all the couple's assets, including the inheritance from her mother, had to be split down the middle. The last thing Susan would have wanted was for half of her hard-earned life savings to wind up with her daughter's ex-husband.
Yet that's what happened.
Standard wills, joint accounts, beneficiary designations, and even Revocable Living Trusts are not enough to protect your family. They won't protect your children's inheritance if they get a divorce; half the money and property may wind up with the ex-spouse, just like in Susan's case.
And it's not just if your child gets a divorce. When your child dies, your child most likely will leave everything to his or her surviving spouse. The spouse may live another 20 or 30 years, and during that time may start a new life with a new boyfriend, girlfriend, husband or wife. And when your late child's spouse dies, everything may go to the new spouse. Leaving your grandchildren, your child's children, with nothing.
And if you leave an inheritance to your son or daughter, and they get sued for any reason, the inheritance may be taken away.
Time and again, "standard" estate planning fails to protect families. The money and property you hoped to leave to help your kids, and then your grandkids, ends up in someone else's hands, out of your family, with your child's ex-spouse or creditors. Wills, joint ownership, beneficiaries, and standard trusts won't work.
So what can you do? What should you do to protect your loved ones? I'll tell you...next week! But, if you just can't wait, I've written a new book: "Why Wills Won't Work To Protect Your Assets". You can get the book at your local bookstore, or at our website www.whywillswontwork.com
