Mark Kohler explains that revocable living trusts protect your assets from probate and ensure they go to your intended beneficiaries, regardless of how much you have. Trusts also shield inheritances from financially immature heirs, so life insurance proceeds or other assets won't be squandered by young beneficiaries.
At what income level would you recommend I open up a revocable living trust?
It's not about income. It's do you have any assets at all? Do you have a business or rental property or a home that you want to go to the right person when you die? It could be worth a million. It could be worth 100 grand. It could be worth $10 million. The dollar amount doesn't matter. Where do your assets go and do they go through court and a fight? That's what you're trying to avoid. Don't worry about your income. You can make $10 a year or $1 million a year. That doesn't tell me if you need a trust. Number 2, if you have minor children or children that act like minors, you need a trust because you're going to leave them something. And if you leave them even $500,000 on a little bit of life insurance on a 401, do you want that to go to your minor children? And at age 18, they're going to go around and start buying sports cars? Which they will do. No. Not on my watch. So, we have a trust to protect the kids from themselves. You could be a single mom with a million-dollar life insurance
policy that costs you $300 a year.
Where do you want that million to go? To a trust. And you can change that trust the rest of your life and you're in control. If you get remarried, great. We'll modify it. But if you die, that million dollars is going to end up in an 18-year-old's hand. That would have ruined me. No good.
