Kevin’s Peace of Mind
www.kevintharpe.com (770) 503-1022
How a Hot Rod Can Help You Plan for the Future Title of Assets Is the Engine Your Car Needs
Ever since I decided to switchmy pursuit from being a tax attorney to a career in elder law and estate planning, I’ve tried to encourage my clients to focus their planning on one very important question:“What is going to happen tomy assets when I die?” I recall a few years ago, whenmy wife’s uncle got a“how to build a hot rod kit.” This kit showed him how to rebuild the frame, doors, tires, and even came with a new logo. But what he didn’t have was a rebuilt engine. He knew that when it came time to drive the car out his garage, nothing was going to happen until he had an engine tomake the car run. In the same way that my uncle-in-law knows he needs to pair together the restoration kit and the engine tomake the hot rod drivable, a person’s approach to keeping their assets safe involves a solid preparation process. All of us have assets— some have different types of assets than others, and some have more assets than others—but we all have wishes about what we want to happen to those assets when we die. For this reason, it’s important to put those wishes in a legal document. In analogy to the hot rod restoration kit, basing your planning on a legal document alone (such as a will) equates to building the car. The traditional legal document people choose is a will. Unfortunately, a will by itself is akin to a restoration kit. It shows you how to rebuild the frame, doors, and tires, but a will is still just a car with no engine. In this scenario, the engine (or the legal step that will make our car run and keep our assets protected) is a title of assets. What is going to determine what happens to our assets when we die is getting a title of assets in coordination with our wishes as expressed in our legal document.
To actually put this analogy into action, I recommend a trust, which is the only estate- planning document that allows you to coordinate your wishes with your title of assets, so you know exactly what is going to happen to your estate if something happens. The best part of using a trust is that you can make plans while you are still living. In order to reap the benefits a trust can offer, you must first decide if you want a revocable or irrevocable trust, as each has unique benefits and limitations. For example a revocable living trust allows you to make changes in its provisions during your lifetime while maintaining ownership of the assets titled in the name of the revocable trust. On the other hand, irrevocable trusts can’t be changed, and any assets they contain must remain in the trust without possibility of retrieval. Because you do not have to give up ownership over the assets titled in a revocable trust, and because you have the flexibility of making changes to a revocable trust anytime
during your lifetime — the opposite of an irrevocable trust —we recommend a revocable living trust for our clients . The start of a new year is a good time to set goals. Whether these goals are small, like only eating dessert once a week, or big, like making plans to travel more often, January is the optimal time to take stock of the previous year and evaluate ways in which you want tomake the most of your time and better your life overall. Make the choice to be proactive in your estate planning instead of avoiding it; it’s absolutely vital for your future. Our teamunderstands that this type of planning can be uncomfortable, since it necessitates facing your ownmortality, but we can help you plan for the future, establish your trust, and ensure that your metaphorical hot rod works just as hard as you do to protect your family.
-J. Kevin Tharpe
www.kevintharpe.com | 1
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