Why the Rich Put Everything in a Living Trust (And You Should Too!)

When people hear the phrase living trust, they often assume it's something only the ultra wealthy have. Something reserved for the rich, the famous, or people with private jets or beachfront estates. But here's the truth Wealthy families already know. A living trust isn't just for the rich. It's how people become rich and stay rich. A trust isn't about how much you have today. It's about what you want to have in the future, who you want to have receive it, and how you want your legacy handled without the government or the courts deciding for you. Marc hi, I'm Mark J. Kohler, CPA attorney and small business advocate, and I'm going to break down why wealthy families put everything in a living trust and why you should too. By the end of this video, you'll understand exactly what a living trust does, why a will isn't enough, and how your trust safeguards your assets, your family, and your legacy. Let's get into it First, a living trust keeps your family out of probate court. See, when someone dies without a trust or even with just a will, the family has to go through probate court. It's public, it's expensive, and it's slow. And the court, not the family, controls the process. With a living trust, however, the family avoids probate completely. Your trustee steps in immediately and follows your instructions that are predefined and no judge and no delays. No strangers in your business. The wealthy don't leave their family tangled up in legal proceedings while they're grieving. They leave clarity. They save money, they save time, and they save a lot of unnecessary emotions between family members. They see, a trust isn't about you. It's about your assets ending up in the right hands and in the most efficient way. It's about making the worst experience of your family's life easier. Number two, a living trust gives you total control even after you're gone. In the Supreme Court of the United States, this is often called dead hand control, where your hand comes out of the grave to control all of your assets even while you're gone. Now, a will can only say who gets what, but a trust can say who gets what, when and how, and even under what certain conditions. This is how the wealthy parents protect their heirs from bad decisions, predators, creditors, and even themselves. Examples of what wealthy families will often do is allocate money for college, Maybe even specific GPAs are required. They'll provide money for a first home. They'll provide money for a business startup, and funding with a business plan presented to a trustee or a Panel. They'll provide distributions at stages. For example, at ages 25, 30, 35, they'll even create restrictions for addictions of gambling or financial instability. But they also want to encourage good behavior for charity or education or mission work. This isn't about control for control's sake. It's about protecting your children, helping them make good decisions, and learning about money before they receive maybe all of it. More specifically, that example of money in stages, a wealthy family might say a third at age 25, a third at age 30, and then a third at age 35. I'll say this. When I was age 25, if I would have received a big inheritance, I would have blown it. I wouldn't be here today. And a lot of kids at age 25 aren't ready to receive a lot of money without some support and strings and control mechanisms. So at age 25, they get a third. They might blow it. They get another third at age 30. Boy, they're going to be a lot smarter about that money, but maybe not have the greatest success. But at age 35, when they get the rest of the, they're going to treat that very, very differently. Another idea is matching income distributions based on reward or hard work. For example, if you want a child to go into maybe a liberal arts degree or some sort of career that maybe doesn't pay as much, they can get matching funds from a trust to help them do something that might be more altruistic or fulfilling for them. And they don't have to chase the dollar to do something they're passionate about. A trust can also release funds for education and home purchases. Like I said, the children grow and evolve with their finances with the help of the trust, not just waiting for the big payout. See, a will dumps money on your family in one big chunk. A trust protects your family from the money. Number three, a living trust can provide safeguards for you while you're still alive. See, the word living in a living trust is there for a reason. See, if you become incapacitated, have dementia, Alzheimer's, a stroke, heaven forbid, or even a severe accident, the trust allows for a backup trustee. It could be your spouse, if you're married or not, but someone you've chosen in advance to pay your bills, to manage your real estate, run or wind down your business, handle your investments. This is what the trust is built for. It has a backup trustee. See, without a trust, your family may be forced to go through court proceedings just to access your money and take care of you. It's called a custodianship something that is very expensive and time consuming. Wealthy families plan for decades of life, not just for death. And anticipate the worst case scenario. See, a living trust doesn't just protect your family after you're gone. It can protect you while you're still alive. Number four, a living trust is the blueprint for your entire financial life. It helps you stay organized. A trust is where your financial world becomes an organized system, not just scattered accounts and documents. I want your trust to own all of your entities. Your LLC is your corporations, your rental properties, your bank accounts, your brokerage accounts. Be the beneficiary of your life insurance. Be the owner on title of your personal residence. Everything stays connected and organized under the trust provisions. This is why the wealthy families say the trust is the blueprint. Because it maps out where everything goes if something happens to you. But it also owns everything. It organizes everything. See, in order to be successful, being organized is the first step. It becomes the central hub of the trifecta, which, you know, I'd love to talk about. Your business generates cash flow. Your investments build long term wealth. Your trust owns it all and helps keep it organized. A trust doesn't make you wealthy. It enables wealth to stay organized and in the family instead of leaking out through potential probate fees and after you're gone. But also bad relationships or bad timing. If you want to build wealth like the wealthy, you need the structure the wealthy use. The trust is the starting point and the base case of the trifecta. And finally, you need to know. It's easy to update your trust and maintain it. Sometimes people avoid trust because they're afraid of locking in certain decisions that they'll regret later. That's not how a living trust works. While you're alive, you're the trustee. It's a revocable living trust for a reason. You can revoke it and change it anytime you want. New child, you can update it. Child in a problem, you can update it. You get divorced, remarried. A child gets divorced or remarried, you can update it. You buy property, you always, always have the trust to own it. You want a business continuation plan or a property exit plan, you'd lay it out in the trust so that your family knows how to handle it. Kids become adults. Change distribution rules. You want to support a charity later in life, add that to the trust. See, wealthy families don't create a trust to forget it. They also maintain it in a way to maintain their business and their goals. A trust isn't set in stone, it's set in motion. In sum, a living trust isn't about being rich. It's about acting rich. It's about acting like someone who plans to be rich. See, if you don't create your own plan, the government has one for you when you pass away. But it's more than that. This trust is a plan for you while you're alive. And having no plan is the worst plan of all. So here is a simple blueprint for you to protect your family and your legacy. Number one, set up a living trust now, not later. Number two, name the right trustee or group of trustees. Maybe three at the most. Number three, move your key assets into the trust so it actually works. The trust that's not funded is worthless. Number four, you're going to maintain the trust by transferring assets into it on a regular basis as your investments and businesses and assets change. And finally, you're going to review it every few years as your life changes and update it as necessary. And remember, you don't need to be perfect. Your your trust doesn't need to be perfect. You just need to get started and you can always amend it later. Wealthy families do that all the time, and it's very affordable to do. If you're ready to create your trust the right way, with guidance, customization, and a plan tailored to your family, click the link below and schedule a call with one of my lawyers at KQS Lawyers. We'll help you design the trust that protects your wealth and the family you love. If this video helped you in any way, please also give it a like a subscribe and turn on the notifications and share this with someone who needs to take control of their legacy before life makes their decisions for them. I'm Mark J. Kohler. Thanks for watching and I'll see you in the next video.