First let me state that you need legal capacity to do will / trust, etc.
A very good reason to form a Trust is if a family member has a substance abuse or gambling problem, etc.
- inherited assets or money can be squandered
- even worse, a windfall of funds may enable a child to hasten their death because money doesn’t stop self-destructive behavior, it only intensifies it.
- Trust could name Trustee to oversee and manage assets (rec corp. trust company)
- Trust could have requirements for distribution (maybe even require drug testing)
- Trust can also include creditor protection for beneficiary
- I hate my son or daughter’s (significant other) what can I do?
In general, you can disinherit a child, but you cannot put a provision in a will that limits an inheritance based upon marriage, divorce, or change of religion, but you can for a Trust with provisions in which you only provide for the child / grandchild.
- When it comes to assets, there is a legal difference between shacking up and marriage.
In Mississippi, there is no such thing as “common law” marriage (since 1956).
If you are married, you have marital property rights even if your name is not on deed or in will or accounts. If not married, no rights to property (not in your name).
If you have been married for nine years, my advice is wait until 10 years to get a divorce because you can file on his Social Security after 10 years of marriage (even if divorced).
- What happens if he has kids and I have kids from prior marriage but neither has will or trust when we die?
Interstate proceeding and (it is up to luck of the draw regarding who died first) no inheritance for step-children (my mother is an example).
What if we do a Trust? Good, but make sure it is irrevocable after first spouse dies.
- Members of LGBTQ community need at least a will (especially if you are not married).
On average only 27% of heterosexual adults are single (or 73% are married).
Approximately 47% or LGBTQ community are single and never been married.
Only 10% are married to same sex partner
6% are living with same sex partner
11% are living with a different sex partner
16% are married to different sex partner
5% are divorced
3% are separated
2% are widowed
Much different breakdown than heterosexual community and, therefore, no as likely to be “protected” by the statutory marital property laws.
Basically if you want to keep your financial affairs private and avoid taxes, form a Trust. (Federal Estate Tax Exemption in 2022 is $12.06 million / $24.12 million for a couple).
TOM PETTY‘s estate was “Free Falling”
- He died from accidental drug overdose in 2017.
- When he died, he had a current wife and 2 daughters from previous marriage.
- His Trust stated that his wife and 2 daughters were entitled to “participate equally in management” of his music empire. Does that mean 2 kids get to of the 3 LLC management’s votes, thus giving them control and ability to out vote their stepmom? (After $5 million lawsuit, they finally settled and announced that they would all have equal standing – still seems like that means the 2 daughters could out vote stepmom.)
PRINCE‘s family said “Let’s Go Crazy” after he died without a will.
- There was a 6 year battle among the heirs (mostly elderly half-brothers of Prince) over Prince’s estate, which the IRS valued at $150 – $160 million, with 2 heirs (half brother Alfred Jackson and half brother John Nelson) dying during the 6 year battle.
DAVID BOWIE‘s estate plan needed some “Ch – Ch – Changes”
- Bowie’s will left $2 million to an assistant and $1 million to a nanny. Bowie left the remaining assets 1/2 to surviving wife and 1/2 to his children, but his estate was valued at over $100 million and without tax planning (such as a Trust), his estate owed about $18 million in taxes.