Battle of Wills and Living Trusts

Q Which is better to have, a will or a living trust? The lawyer who drew up our wills felt it was better to have a will. But at a seminar here, another attorney recommended living trusts. How can we find an impartial answer?

- E.K-B.

Littleton, Colo.

A Both instruments have their fans, says Paula Hogan, a fee-only financial planner in Milwaukee.

To decide which is best for you, start by calling your local bar association to find out how the law treats both trusts and wills in your state.

Wills are public documents, subject to probate. Thus, they have a certain closure that trusts do not.

On the other hand, trusts are private, not published. They would cover whatever property is transferred to it.

So if you have property in several states, a trust may make the most sense, Ms. Hogan says.

Trusts may also be less costly, especially in states with fairly high probate expenses, such as California and New York.

You can, of course, have both.

But whatever you do, go through an attorney, says Hogan. Don't just go out and buy a form "trust agreement."

One excellent discussion of trusts and wills is found in "Marshall Loeb's Lifetime Financial Strategies," (Little, Brown).

Q I plan to change jobs. I have $15,000 in a company-sponsored 401(k) plan. I want to roll over the funds. My goal is to invest in a balanced mutual fund. The management fees, however, seem fairly high while the investment amount is somewhat low. Any suggestions?

- T.C.,

Denver, Colo.

A Expense ratios of most balanced funds are actually fairly low, below a typical expense ratio of 1 percent, fund experts say.

The Fidelity Balanced Fund, for example (800-544-8888) has a current expense ratio of 0.71 percent.

The T.Rowe Price Balanced Fund (800-638-5660) is 0.78.

The Vanguard Balanced Index Trust comes in at a rock-bottom 0.2 percent (800-662-7447.)

Balanced funds generally keep about half their assets in stocks and the rest in bonds. But fund managers can and often do change the mix to meet their perceptions of the market.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK