A common misconception is that retirement planning is only necessary if you are one of the 1% – the wealthy.  In fact, it doesn’t matter what your income is.  If you have a paycheck, you should have a strategy.  Your strategy should involve protecting what you have as well as a focus on growth of assets for your future.

A critical part of your planning should start with your legal documents.  Having these in place and updated will help protect your family should your plan be stressed – the stress of disability or death.

Legal documents add protection.

In addition to basic legal documents, such as durable powers of attorney for financial and health care matters, you may want to consider the use of a revocable trust.  A properly prepared trust will help make sure that your financial affairs flow the way you want them too, even if you can no longer take care of your affairs.  It also keeps the assets placed in the trust, such as your home or automobiles, under your control.  This is because the trust is “revocable” – you retain control.

A trust is like a corporation.  It is a legal entity unto itself.  It is operated according to the terms and conditions set forth in it.  The document spells out all the operational guidelines and reflects the intentions of the Grantor – the person who creates the trust.  The Trustee is the person who manages all the assets of the trust – and the successor Trustee steps in when the original can no longer do so. 

Funding a trust is key.

Once a trust is created and signed, it must be funded – this happens as assets owned are re-titled into the name of the trust.  This can be done with a deed, for example, when it comes to real estate, or with the title to a car, stocks, etc.  Retitling assets into the name of a trust effectively funds the trust.

Because the trust exists beyond your lifetime, at your death, this tool may allow your family to avoid the legal procedure known as probate.  Probate can be a costly and time-intensive process of the courts administering your estate after your death.  Many families prefer to avoid it.  Using a properly funded revocable trust may provide a smooth transition of trust assets to the intended beneficiary.

“Visiting with a local estate planning attorney to help you create the ideal trust is advisable.”

There are many aspects of the trust that can be tailored to meet your specific circumstances and unique family needs. Although there are some services online that can provide legal services such as trust planning, visiting with a local estate planning attorney to help you create the ideal trust is advisable.