If you do estate planning, your assets will be distributed either via trusts or through a will. The one you choose depends on how important you deem your privacy and the privacy of your family.
Wills are filed in the county courthouse and are open to public scrutiny. Trusts are private documents, the contents of which are only open to your beneficiaries.
"If a person has a living trust, their will just says, 'I leave all of my belongings to my living trust,'" says Marshall Jones, an attorney and accredited estate planner at RMJ Family Wealth Planning, in West Palm Beach, Fla. "It doesn't have all the provisions in it to provide for grandchildren and children or special needs cases or whether your spouse gets the income, et cetera."
Our experts recommend that you explain unequal distributions of assets or deliberate exclusions of heirs to avoid family fighting and legal battles. However, if you place such deeply personal disclosures in your will, they will become public knowledge.
Edward W. Gjertsen says he knows from firsthand experience that some investment firms plumb through these public records to drum up business. The Illinois chapter president of the Financial Planning Association and vice president of Mack Investment Securities, Gjertsen says that at one job early in his career he was instructed to obtain these records and hand them over to a financial representative, who would then contact a family member of the deceased.
"He would call up and say, 'I'm sorry Uncle Bill died, but I understand you just got $50,000. Can I help you invest it?' I did that for a day and I felt very gross. I just didn't feel right doing it."
And it's not only investment professionals who are doing this, says Gjertsen.
Takeaway: If you want to make all your personal business public and expose your loved ones to fraudsters and marketers, leave it in a will. If you value privacy, put your stuff in a trust.
