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Liz Weston

Q&A: Trusts and wills aren’t the same thing. Here’s how they work

February 7, 2022 By Liz Weston

Dear Liz: I understand what happens with a living trust when both spouses die at once. But what happens when just one dies? Is the trust tossed out, since the surviving spouse is usually the trustee? What about the stuff that the deceased wanted to go to his or her kids? And what about the wills? When does that get disbursed? Please explain how trusts and wills work, especially for blended families. I’m sure I’m not the only one with questions.

Answer: A complete answer would take many, many more words than this column allows, which is why you should consult a knowledgeable estate planning attorney who can give you personalized advice.

But in a nutshell, wills and living trusts are both documents that allow people to name who they want to get their property. The main difference is that living trusts avoid probate, the court process that otherwise follows death.

Living trusts are considered revocable, which means the creators can make changes during their lifetimes. At some point, though, the trust usually becomes irrevocable, which means changes no longer can be made.

If a single person makes a living trust, then the trust would become irrevocable when that person dies. With a married couple, part of the trust often becomes irrevocable when the first spouse dies, with the rest becoming irrevocable at the second spouse’s death.

Such a setup allows you to bequeath money and property to your kids if you’re the first to die, rather than hoping your surviving spouse — and potentially your surviving spouse’s future spouse — will do so later.

Filed Under: Estate planning, Q&A Tagged With: Q&A: estate planning

Friday’s need-to-know money news

February 4, 2022 By Liz Weston

Today’s top story: How to get what you want at your next job. Also in the news: Medicare to offer free at home COVID-19 tests in early spring, how your parents’ debt could outlive them, and what you need to know before you claim your child tax credit this season.

How to Get What You Want at Your Next Job
Before you start polishing your resume, here are tips from career coaches on being strategic with your job search, preparing for negotiations and asking for what you want.

Medicare to Offer Free At-Home COVID-19 Tests in Early Spring
Members will be eligible for eight free over-the-counter tests per month through local pharmacies.

How Your Parents’ Debt Could Outlive Them
Should you fear ‘filial responsibility’ laws?

What You Need to Know Before You Claim Your Child Tax Credit This Filing Season
The child tax credit was expanded up to $3,600 for the 2021 tax year. Here’s how to claim yours.

Filed Under: Liz's Blog Tagged With: child tax credit, covid tests, job benefits, Medicare, parental debt

Thursday’s need-to-know money news

February 3, 2022 By Liz Weston

Today’s top story: How your parents’ debt could outlive them. Also in the news: 7 Black financial influencers to follow in 2022, what rising interest rates mean for personal loans, and just how passive js passive income?

How Your Parents’ Debt Could Outlive Them
When you can and can’t be held personally responsible.

7 Black Financial Influencers to Follow in 2022
Black financial pros shared their advice about the Great Resignation, buying a house in a competitive housing market and investing in crypto.

What Do Rising Interest Rates Mean for Personal Loans?
Hikes in overall interest rates can impact personal loans, but factors under your control can also influence the cost.

Just How Passive Is Passive Income?
If you want to earn passive income, be ready to work for it.

Filed Under: Liz's Blog Tagged With: Black financial influencers, interest rates passive income, parental debt, Personal Loans

Wednesday’s need-to-know money news

February 2, 2022 By Liz Weston

Today’s top story: 5 common objections to buying an electric car, debunked. Also in the news: How to Avoid Long Lines at Rental Car Counters, Financial Therapists Say to Disrupt Debt Cycle, Look at Your Money Beliefs, and 10 Easy Tricks for Saving Money on Travel.

5 Common Objections to Buying an Electric Car, Debunked
Many consumers are still hesitant to buy EVs, despite rapid improvements to charging ranges, selection and price.

How to Avoid Long Lines at Rental Car Counters
With so many ways to jump the line, there’s no need to get stuck waiting at the rental car counter.

Financial Therapists Say to Disrupt Debt Cycle, Look at Your Money Beliefs
If you find yourself in a cycle of debt, you may need to address the root cause. These tips from financial therapists can help.

10 Easy Tricks for Saving Money on Travel
Travel is expensive, but there are plenty of ways to cut costs.

Filed Under: Liz's Blog Tagged With: electric cars, financial therapists, rental cars, travel tips

Tuesday’s need-to-know money news

February 1, 2022 By Liz Weston

Today’s top story: How to score points in the credit game. Also in the news: 5 credit card trends to watch for, student loan payment plan promises forgiveness but rarely delivers, and how to tell if a bank account is right for you.

How to Score Points in the Credit Game
The traditional advice of paying on time and keeping balances low will eventually result in decent credit. But you can speed it up.

5 Credit Card Trends to Watch for in 2022
Expect more customized rewards and incentives, a more seamless overall customer experience and a big resurgence in travel credit cards, among other things.

Student Loan Payment Plan Promises Forgiveness But Rarely Delivers
Most borrowers are unlikely to ever see that debt forgiven, despite the baked-in promise to do just that.

4 Ways to Tell if a Bank Account Is Right for You

Filed Under: Liz's Blog Tagged With: banking, credit card points, credit card trends, student loan forgiveness

How your parents’ debt could outlive them

February 1, 2022 By Liz Weston

Many people believe one of two common myths when a parent dies in debt, says Chicago estate planning attorney Michael Whitty. The first myth is that an adult child will become liable for their parents’ debt. The second myth is that they can’t.

Adult children typically don’t have to pay their parents’ bills, but there are exceptions. And even when a child doesn’t have to pay directly, debt could reduce what they inherit.

Debt doesn’t simply disappear when someone dies, Whitty explains. Creditors can file claims against the estate, and those claims usually have to be paid before anything is distributed to heirs. Creditors also are allowed to contact relatives about the dead person’s debts, even if those family members have no legal obligation to pay.

In my latest for the Associated Press, some issues to explore if you’re concerned that your parents’ debt might outlive them.

Filed Under: Liz's Blog Tagged With: Estate Planning, parental debt

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