A revocable
Living trust is a love note
To your family

When I worked in the entertainment industry, whether it was working on a screenplay, editing a movie, or adding visual effects to a shot, these very different tasks shared something in common. I would start from the end and work forwards to figure out how I was going to get to the desired result.

This is also the case with financial planning. What do you want the end of your story to be like for yourself and your family? Decisions will need to be made around your healthcare, and someone will need to assign title to all of your assets and distribute them to beneficiaries. How do you want that to play out?

If you can’t be bothered with any of this, you can always do nothing. In the absence of any plan or instructions, your family and your doctors will be in charge of making decisions about your healthcare. You can cross your fingers and hope they get it right.

You can let your state’s bureaucracy determine through probate how all of your money, property, and belongings will be distributed. If your family members disagree with the state, you can let them fight it out in court at their own expense. It’s ok, because you won’t be around for any of this, right?

Or, if that doesn’t sound appealing, you can work with a licensed Estate Attorney to draft a revocable living trust. This is a document that can hold title to your assets and convey your exact wishes as to how you want your money and your property to pass to your beneficiaries.

Perhaps more importantly, a revocable living trust will contain a Durable Power of Attorney, a Healthcare Directive or Living Will, and Healthcare Proxies or Surrogates. Collectively these are called “incapacity documents.”

Generally, the Durable Power of Attorney assigns a person to handle your financial decisions, while the Healthcare Proxy will handle your medical decisions. The Healthcare Directive or Living Will states what kind of treatment you want to receive if you’re incapacitated.

In the event you get to a point in your life where you can’t communicate your wishes to a doctor, these documents communicate those wishes for you. Above all they make it so your family isn’t left to argue over what kind of care you want, or who should be in charge of those decisions. They can also prevent the wrong person from assuming control of your finances.

That the trust is revocable means that if circumstances change in your life, you can always update it. A decision you make at age 60 doesn’t have to be locked in until you’re 95. Also, any assets held by the trust are fully accessible to you without restriction. You won’t be calling a lawyer just to make a withdrawal from a checking account.

If you’re ever in doubt about how you to show your loved ones how much you care about them, draft a trust and share your plans with them. It’s one of the best gifts you can give.