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Financial Literacy - Planning for your heirs
Why you need a revocable living trust
Suze Orman says these trusts are far superior to wills in passing along your assets.
Planning for your heirs

Spotlight: Suze Orman

For many, Suze Orman has become synonymous with the voice of the financial conscience thanks to her hit CNBC television show and its popular call-in segment, "Can I Afford It?" Mixing humor with sound advice, she's saved untold numbers of viewers from financial calamity.

At a glance

Although her latest book, "Women & Money: Owning the Power to Control Your Destiny," is geared to the specific financial needs of women, it contains valuable lessons for all, particularly on the subject of estate planning.

In Orman's words, we're all going to die someday, and if we don't prepare an estate plan of our own, one will be generously provided for us by the state. In this interview, she explains why she believes revocable living trusts are far superior to wills as estate-planning tools.

What are the must-have documents people need to ensure that their estates don't wind up mired in probate?

The main "main document" that everybody needs, every single person needs -- and I know that other people have different opinions about this, but this is my opinion -- is a revocable living trust. In fact, the less money you have, the more you need a trust.

A will is simply a document that states where your assets are to go upon your death. But, in most states, unless you have a very small estate or have no real estate as part of your estate, a will makes it mandatory to go through the court procedure known as probate. And the reason is it takes a judge to first authenticate your will, to verify that in fact it is the real thing and, second, to transfer your assets, your real estate, from your name over to the beneficiary you're leaving it to.

All wills have to go through probate, and to go through probate, you have court costs, an executor of the will and usually a lawyer that takes the will down to the probate courts.

-- Posted: Nov. 19, 2007
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