Bear Paw, I am about to turn 71, wife will turn 60 in the spring so we have gone through this to a lesser extent I would imagine. First of all, most major banks have a trust department and are a good place to start for free. I would talk to several to see if one has an advantage over another in advice.
My wife and I decided a Living Trust was the way to go for us. We have two children who are grown and doing well on their own. We "plan" in the trust to leave everything to them equally and they can decide how to split it up based on their needs when the time comes. The nice thing about a Trust is there is NO Probate like with a will. I have heard way too many horror stories about wills. With a will, all assets are essentially frozen until an attorney that the estate hirs settles the estate in court. The attorneys can charge substantial amounts of $ for their services. Then people can contest the will. They are inexpensive to set up, much less than a Trust. Conversely, with a trust we have our medical decision making rolled into along with all financials. Once I expire, my wife becomes the next trustee and then when she is called home, our son (assuming he is alive) is next. Once he takes things over, the Trust dissolves. What we like about the trust is if my wife and I were in an accident tonight, then our two rental properties and our home, bank accounts, investments, etc all are immediately available to them. With two rental properties, if they are not in a trust but in probate, things can get frozen for months or possibly years and this makes it difficult to serve the renters or fixe things or even kick them out. So, assuming we crash tonight and are gone from this ball, our kids have access to our safety deposit boxes and all numbers to contact our bank and investment people and can make plans, spend money, get on with their life IMMEDIATELY.
The difficult things you can run into are if you do not want things divided up evenly. That can be done in the Trust or the will. Say you don't want your young children to have a lump sum of money, you can set it so it is dispersed over time. Our children are in their middle 40's, no grand kids and one spouse so it should be fairly simple.
If you have businesses, which we technically do on a small scale, that does create some different liabilities. You want the business to continue or be sold so that needs to be considered.
We looked at the insurance option and it has some merit. You can buy a paid up life insurance policy for whatever amount you can afford. Yes, it is tax free and yes they are get more expensive as you get older. You just have to do the math on it. Perhaps you want to consider a little of both. Frankly, if you are worried about your kids blowing the money either way, they need to be educated on finance. It is going to happen, no way around it.
Something we recently did was take a lump sum and put it in a Charitable Account. Even though RMD's start at 73 now, you can start these at 701/2. It is a tax advantaged plan and we can make certain some important giving (to us anyway) continues until that account is done. The kids can't just blow it not that I think they would.
Taxes are a big killer of both your wealth and the people who inherit it. A good tax person will plan around it. Just be beware of a person who is all one thing or the other like all insurance. You have lots of options based on your personal needs. Best of luck with this.
. I wonder if you can be self insured?
