Understanding the Difference Between a Will and a Living Trust
When planning for the future of your children as you get older, there are a few options on how to pass on your assets such as property, life insurance, stocks, etc. The two major ways of stating and distributing your assets after your passing is with a living trust or will. When you hear the words trust fund or wills, it refers to estate planning. Although there are different trusts out there, the main one I will focus on is a living trust.
Will
A will is a document that is created to help distribute assets and properties to a beneficiary after one passes away. With a will, it will be submitted through a probate process, which is a court process. In this process, the courts will validate the will and ensure that all the instructions are followed properly while also repaying any creditors. The downfall to a will is that it becomes public so anyone can see the distribution of your assets to your selected beneficiaries. On top of not having privacy, it could take several months to even years for the court to sort everything out!
A will is a document that is created to help distribute assets and properties to a beneficiary after one passes away. With a will, it will be submitted through a probate process, which is a court process. In this process, the courts will validate the will and ensure that all the instructions are followed properly while also repaying any creditors. The downfall to a will is that it becomes public so anyone can see the distribution of your assets to your selected beneficiaries. On top of not having privacy, it could take several months to even years for the court to sort everything out!
Living Trust
A living trust is a legal document that states three parties: Grantor/Trustor, Trustee, and Beneficiaries. The grantor/trustor is the individual or couple who establishes/creates the trust. The trustee is the person nominated to be in control of the trusts assets. In many cases, the trustee is the same as the grantor/trustor. Beneficiaries are those at the receiving end who will benefit from the trust. A trust is beneficial to most people who have property worth $100,000+ and/or those who have large amounts of assets. In certain states, properties at $100,000+ can be subject to legal fees in the probate process. With a living trust, it bypasses the whole probate process and all assets can be immediately accessed by the beneficiaries. As opposed to a will, a living trust is private so it does not go through a probate process, therefore it is NOT a public record. Things that can be listed in a living trust include: stocks, bonds, real estate, life insurance, personal property, etc.
A living trust is a legal document that states three parties: Grantor/Trustor, Trustee, and Beneficiaries. The grantor/trustor is the individual or couple who establishes/creates the trust. The trustee is the person nominated to be in control of the trusts assets. In many cases, the trustee is the same as the grantor/trustor. Beneficiaries are those at the receiving end who will benefit from the trust. A trust is beneficial to most people who have property worth $100,000+ and/or those who have large amounts of assets. In certain states, properties at $100,000+ can be subject to legal fees in the probate process. With a living trust, it bypasses the whole probate process and all assets can be immediately accessed by the beneficiaries. As opposed to a will, a living trust is private so it does not go through a probate process, therefore it is NOT a public record. Things that can be listed in a living trust include: stocks, bonds, real estate, life insurance, personal property, etc.
A trust is beneficial for estate planning for those who have large amounts of assets. By establishing a specific living trust known as an A-B Trust, an individual can reduce the amount of taxes paid significantly. For example, in 2012, the current estate tax is $5.12M with a cap at 35% over the $5.12M. In an A-B Trust with a couple passing their assets to their one kid, they would designate half the fund to the surviving spouse and the other half to the kid. The surviving spouse and the kid will then each receive a tax break of $5.12M giving a sheltered total of $10.24M from estate taxes. When the surviving spouse passes, then his/her half is giving to the kid who is then subject to another $5.12M tax break. Unlike a trust, a will however will be only have a tax break of $5.12M.
Conclusion
When comparing the differences of having a last will versus a living trust, it shows that the trust comes out on top. A trust will help to give privacy, immediate access to assets from beneficiaries, AND tax breaks. For those who are near the age of deciding what to pass on to their children or know someone in that situation, help them understand the difference of the two and sway them toward a living trust if feasible!
When comparing the differences of having a last will versus a living trust, it shows that the trust comes out on top. A trust will help to give privacy, immediate access to assets from beneficiaries, AND tax breaks. For those who are near the age of deciding what to pass on to their children or know someone in that situation, help them understand the difference of the two and sway them toward a living trust if feasible!
Give to the Poor and You Will Never Suffer Lack
Did you know that there are nearly two hundred verses in the Bible that deal with the poor? Bible scholars say that if God mentions something twice pay close attention because in the presence two or more witnesses the truth shall be established. Now, if God mentions something not just twice, but two hundred times, this indicates a truth that is close to the heart of God. The Bible records many special blessings and rewards to those who take care of the poor. Proverbs 28:27 takes it even further by saying that if one gives to the poor he or she will never lack, but if one ignores the needs of the poor, they will receive many curses. That passage alone would get anyone's attention.
In God's Kingdom it takes faith to receive the promises of God, so if he says you will lack nothing if you care for the poor, it will happen for you. Believe it. Belief is not just a mental agreement with what God is saying. Faith is active and requires an action on the part of the believer. Most people have passive faith, which is at best wishful thinking. If you want to get into the flow of God's Kingdom blessings and prosperity then do as the Bible says and take care of the poor. Who are the poor? In general, they are family, neighbors and friends we pass by every day on our way to work, school, shopping, church or any other routine destination. According to the Bible, the Greek word for poor is penes; which not only means the homeless or beggar, but it implies that anyone who struggles to make ends meet is considered poor. Therefore, the state of being poor is not based upon income or the lack thereof, but it is a continual pattern of fruitless behavior in which there is no foreseeable way out. A person could have a million dollars in the bank and many more millions of dollars in debt with no idea of how to make a profit. This person is poor. This is the curse of poverty. It is the same curse that God placed upon Adam when he sinned in the Garden of Eden. When Adam turned against God and chose to do his own thing, he was cursed to toil for his living and to live by the sweat of his brow. When Jesus came preaching the Gospel of the Kingdom it was good news for all men. No longer did they have to toil for a living. Just by obeying God, men could enter the Kingdom and partake of the supernatural blessings and prosperity of God. This does not mean that all men in the Kingdom would become wealthy, but it does mean that when we obey God, and seek his Kingdom way of doing things, all that we need would be provided for us.
There was a time in America where our wealthiest citizens had foundations that gave multiplied millions to the poor. They seemed to understand Kingdom principles better than the average citizen. In recent years America has produced many millionaires who have obtained money and celebrity without the character to appreciate the responsibility they owe to society. Many of these individuals will never achieve wealth because they lust for money alone. Wealth is more than the accumulation of goods and finances. It is a position of blessing in which one can share his or her good fortune and promote the financial wellbeing of all those with whom he or she interacts. This is why the wealthiest people give back to their communities. For those who desire to hoard their fortune and ignore the poor, there is a curse. Jesus warned us to beware of covetousness. He said that a man's life consists of more than the things that he possesses (Luke 12:21). Jesus shared a story about a rich man who had accumulated many more goods than what he could store. The man decided to tear down his barns and to build bigger ones so that he can safely store even more for his own pleasure. God announces to the man that he is about to die. God asks him what will happen to all the goods he had stored up. Jesus said that this is the condition of the man who only stores up treasure for himself and is not rich in God. Being rich in God is significantly more satisfying than money. When we value what God values and honor what God honors; he will honor us in return. So if the Bible tells us that the liberal soul shall be made rich it means that anyone who is blessed will richly enjoy all things in this life. Because he gives generously to others; he will also receive generously in abundance.
This article is based upon excerpts from American Heritage 101, American Values Past, Present and Future by Paula Matthews. Ms. Matthews is an author and speaker whose focus is on teaching and demonstrating God's principles for prospering in the family, business and in the marketplace.
Buying and Selling Structured Settlements
Sometimes life throws surprises your way, like unexpected expenses. At other times, there are opportunities or plans where your current financial situation doesn't accommodate.
For those that own a structured settlement annuity, there is the possibility of selling some or all of their annuity in order to get access to cash in a lump sum rather than scheduled payments to take care of current circumstances. It's all about meeting current financial needs.
There's a variety of reasons that people consider selling structured settlement payments, from starting a new business or a home down payment to tuition or medical expenses.
The purpose of a structured settlement is to provide scheduled payments as a form of compensation for a personal injury that might have been sustained. If you were the plaintiff (or assignee) in a settlement, being a recipient of such periodic payments creates an income stream that's now available in most states and the terms are locked in.
When it comes to cashing in on a structured settlement as a lump sum versus a scheduled payment, it's important to understand that as a seller you would not get what looks to be face value. People often look at the total investment, but what they should be considering is known as Net Present Value (NPV). When a structured settlement is set up, its a series of future payments that works in a way that's similar to an amortizing mortgage.
But before you believe you can cash in, you should know that your case needs to be presented before a judge to determine the validity of your request. Numerous factors are taken into consideration, from you current financial situation to what the intended use for selling your structured settlement. If you were injured an unable to work, you could be denied the opportunity to sell as its purpose was to create an income stream to assist with finances as a form of compensation.
There's also the fact that if you were looking to sell your settlement because you wanted a new entertainment system and a few other items that it might be thrown out as well.
Annuities are a popular way to ensure an income, and many have become interested in purchasing them as an investment. The return is better than most savings accounts and as an investment they're a secure means to putting money aside for the future, and the market has grown significantly in recent years.
If you receive scheduled payments and want to sell part or all of your structured settlement for cash then you want a quote from www.mystructuredsettlementcash.com, our network of buyers allows us to typically provide the best offers.
No comments:
Post a Comment