4 Risk Levels of Money Planning

17 Aug 2022 · 1 min

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In this brief instructional video, speaker Jerry Taylor outlines four distinct approaches to estate planning, each representing a different level of risk when transferring money, assets, and property after death. Level 1 – “Do Nothing” leaves the estate to the state’s default intestacy rules, which most people dislike. Level 2 – the “Beneficiary Plan” relies on naming beneficiaries on accounts and property, but can fail if beneficiaries predecease the owner, divorce occurs, or designations aren’t updated. Level 3 – a traditional will requires probate, making the process public, costly, and slower, similar to the Do‑Nothing option in expense. Level 4 – a revocable trust (the “Trust Plan”) keeps the estate private, avoids probate, and is presented as the safest and least risky option. The speaker ends by prompting viewers to consider which plan best fits their needs.

Chapters

There are 4 levels of risk when it comes to passing your money and your assets and your property. And I have it on good information that in every life, it's not a question of if, but when this will happen. Risk level 1. This level is where you do nothing. Though you have no plan, the state where you live has a plan for you. You probably won't like your state's plan, but it will get your money and your assets distributed. Risk level 2. I call risk level 2 the beneficiary plan. This is the plan where you have beneficiaries listed on all your accounts, your property, and this might work unless someone predeceases you, you get divorced, or you just change your mind about who you want to get your stuff and you forget to update your beneficiaries. Risk Level 3 is where you have a will, but your will has to be probated in court and in public. This plan and the Do Nothing plan will end up costing more than all the rest. Risk Level 4, which has the least risk of all, is the Trust Plan. A revocable trust will pass all your assets in private and your heirs will not have to go to probate court. It is by far the safest plan. Which plan will you choose?