Ronald Farrington Sharp

I read a fantastic little book the other day called Living Trusts for Everyone.  It is subtitled “Why a Will is Not the Way to Avoid Probate, Protect Heirs, and Settle Estates.”  In just 117 8″x5″ pages (1-2 hours of reading), you’ll be convinced that you want to have a revocable living trust rather than just a will in place when you die. It was written by Ronald Farrington Sharp, an estate attorney.  Sometimes it doesn’t seem like there are very many “good guys” out there any more, but like Steve Weisman, whose annuity book I reviewed recently, and Jack Bogle, Ron Sharp is one of them.

He starts out the book explaining why wills are a profit center for attorneys.  Sure, you pay less up front for a will than a trust, but when you die what do your heirs do?  They go to the attorney’s office to get the will and guess who they hire to take them through probate?  Whether billed hourly at $150-500, or as a percentage of the estate (1-4% is typical) those fees add up fast, never mind the government probate fees and the expenses for the executor.  $30K total on a $500K estate would not be an unusual amount.  While you may be able to get a will for as little as $250 instead of say $3500 for a trust, it’s the wrong move financially in the end.

The other big advantages of a trust over a will are that it saves an immense amount of time and effort (you avoid probate with all assets inside the trust) and it gives you a lot more privacy.  When your estate goes through probate anyone can see what you owned.

There really aren’t any significant tax or asset protection benefits for a trust, so it is really all about the estate planning.

The book shows you what reasonable prices are for estate planning, as well as some of the “tricks” less ethical attorneys use to run up the price, and how to avoid them (See Chapter 4- Trust Seminars: A Free Dinner, But At What Cost? and Chapter 5- Watch Out For Attorneys).

Two of my favorite chapters were the ones on who MUST have a trust and who DOESN’T need a trust.

Who must have one?

  • Those with minor children
  • Those with disabled beneficiaries
  • Those with spendthrift beneficiaries
  • Unmarried couples (whether gay or straight)
  • Blended families
  • Estates subject to the estate tax (the exemption is currently $5 Million single and $10 Million married, but scheduled to go back to $1 Million at the end of the year)
  • Those who want to avoid the costs and hassle of probate

Who DOESN’T need one?

  • Those with no assets (if you have less than a certain amount, you don’t go through probate)
  • Those whose assets all pass outside of probate anyway- life insurance, retirement accounts, jointly owned assets, gifts, or transfer on death deeds

Perhaps the most important (and longest) chapter in the book is the one that provides instructions to the trustee in the event of your death.  Mr. Sharp is quick to point out that not all work done by attorneys in the event of death is actually LEGAL work, and that the trustee can do it just as easily as a lawyer, he just needs to know what to do.  This chapter takes you step by step through all the little things that need to be done after death, from cancelling credit cards, to getting death certificates (order at least a dozen), to notifying creditors, to contacting the V.A.  This list by itself is worth the price of admission to the book.

The cover price is $14.95, but I see it on Amazon for as little as $8.74.  That’s a bargain by anyone’s standards.  Buy the book, read it, then go get your revocable living trust.  It probably isn’t the first thing you need to do when you get out of residency, but don’t put it off too long.  You certainly should get it done by the time you turn 40.