Many of you have asked about estate planning advice. In an effort to fill this need, which obviously relates to Trusts and Trust Management, WebTrust.com offers the following guidelines. As always, you should investigate many sources for estate planning and always use common sense in making your estate planning decisions.

Here are some basic simple rules...

1. Ask yourself where you want to be in 1 year, 5 years, 10 years and retirement... whatever age that is...
2. Make realistic goals about your finances and experience success as soon as possible. For example, for some, even opening up a bank passbook savings account with $100.00 is a big first step and can be quite rewarding if you are not used to saving!
3. Write your plan down in one place where you can refer to often now and into the future (a Trust document binder would be a great place for this).
4. Start now!
5. Share your successes and failures with others you trust to reinforce your commitment to your plan and to create accountability.
6. You can always start again!

Here is a simple structure to get started...

1. Step #1: Start an emergency fund worth 3 months gross income in a safe liquid money market account at your local bank or in a mutual fund to protect your income and your monthly financial plan. If you lose your employment or have a lapse in income, you can use this while you are creating a replacement source of income. This is why many people increase their debt during these times which is really hard to correct and can put you back for up to 6 to 12 months in your plan!
2. Step #2: Learn the "Time Value of Money" and apply it to all your goals keeping in mind that inflation can make your plan inadequate at the end of the plan after it's too late!
3. Step #3: It's not how much you make that is important, but how much you keep! Get your taxes as LOW as possible by deferring as much taxable income as possible in your employers 401K first, IRA second and self employment investment vehicles third... like Keoghs, SEP-IRA's etc. ...
4. Step #4: If you have to choose between paying off high interest short term debt (like credit cards) and investing money, ALWAYS pay off the debt first. You make more money paying off a 22% interest note than investing at 10% in a mutual fund! However, this should not apply to your emergency fund. Get your emergency fund in place "while" you are paying off the debt.
5. Step #7: Buy a house as soon as possible and stop paying rent! Equity in home real estate has proven to be a good part of an overall healthy estate plan. It also saves tons of money at tax time as well as a deferred investment vehicle... assuming your value increases in a low property tax area.
6. Step #6: Keep your plan in line with your age. Taking risks with our estate plan is no game to play. You should ALWAYS be conservative yet aware of your investment options. Consider the table below as a quasi-guideline where to put your long term dollars:

In closing...

A Pure Contract Trust can be a vital part of an estate plan. The mindset you need to take regarding Trusts is that a Trust is a "paper person" and once the Trust has it's form (getting the Trust started, etc...)  then the Trust can do all the above steps to make "itself" financially strong!  By doing that, you and your family will be taken care of because you have a healthy Estate Trust!