Life is super confusing.
We literally get dumped into this big world full of complicated things like taxes and etiquette and lawn care, and we’re just supposed to know exactly what to do?
My adulthood has been a constant stream of realizing that I misunderstood basic concepts about life that everyone else apparently already knew. Actually that was my childhood, too. So it’s been my whole life. For example:
When I was younger, there was a good stretch of time when I thought “Watergate” was just another word for a dam. Like, a literal gate for water. A water gate.
But whenever I heard people use “Watergate” in conversation, I got this impression that it was not a good thing. As a result, for a few while I assumed that dams were somehow really bad things but had no idea why.
I eventually figured out what Watergate really was; however, that was by no means the last time I misunderstood something. Learning is great and also sometimes embarrassing.
Many people have similar misunderstandings about estate planning. For instance, clients often think their modest assets do not warrant a living trust. After all, aren’t “trust fund babies” supposed to be wealthy? Isn’t a will good enough for me?
Approximately 1 of every 2 clients I talk to doesn’t know exactly what a trust does or how it is different than a will. That is a mostly made up statistic based on the last few client meetings I could remember off the top of my head. I’m not saying it’s not true. I just don’t have the hard data…
But here is a very real statistic: only 42% of U.S. adults currently have a will or a trust. That’s crazy! Part of that is due to the fact that wills and trusts are complex, hard-to-understand documents. And attorneys usually don’t make it much easier.
That’s why I thought I would take the time to explain just what the heck a trust really is.