Many people mistakenly believe that estate planning is only necessary for the wealthy. In reality, a basic estate plan is essential for everyone, regardless of income or net worth, because we all want to minimize confusion, unnecessary costs, and stress for loved ones after a death. Estate planning can be a difficult topic for many families to address, but it’s a necessary one. Without proper preparation and documentation, assets—like houses, retirement plans and savings accounts—can end up in limbo for years, sometimes requiring expensive legal assistance to straighten matters out
An up-to-date will or trust.
Wills are easy to create, but they require the distribution of assets to go through probate. Probate is a legal process that involves
• Validating a deceased person’s will;
• Identifying, inventorying, and appraising the deceased person’s property
• Paying debts and taxes;
• And ultimately distributing the remaining property as the will directs.
The probate process often requires a lot of technical paperwork and court appearances, and the resulting legal and court fees are paid from estate property—reducing the amount that’s passed on to heirs.
A trust can be more expensive to set up and requires professional assistance, but it provides benefits that a will cannot. First, when they’re structured properly, trusts will help avoid guardianship or conservatorship if you become incapacitated. A will only works after you've died; a trust, by contrast, works all the time, including periods of incapacity before death.
Trusts usually avoid probate, which helps beneficiaries gain access to assets more quickly as well as save time and court fees. Depending on how it’s structured, a trust may also reduce estate taxes owed and can protect an estate from heirs’ creditors.
A power of attorney is a written authorization that allows someone else to make financial and legal decisions for a person if that person should become hospitalized, disabled or otherwise incapacitated.
Not all powers of attorney are created equal. Some are put in place for short periods of time only—while a person is vacationing overseas but dealing with legal matters at home, for example. That’s why it’s important to have a durable power of attorney in place, which simply means that the agreement is not for a temporary period of time. It may be valid immediately when it’s signed, or it may go into effect at a later point. But what makes it “durable” is the fact that it will survive your later incapacity. (If a power of attorney is not durable, it is revoked when you become incapacitated – the very moment when you need it most.)
Powers of attorney for property should only be given to trusted individuals, ideally those who are good with financial and legal matters.
Medical powers of attorney can be separated and given to someone else, if desired
Beneficiary designation forms on life insurance policies, 401(k) accounts and other assets will generally override any conflicting provisions within a will or trust. It’s essential to make sure all forms are checked and updated regularly, ideally on an annual basis.
A will is a device that lets you tell the world whom you want to get your assets. Die without one, and the state decides who gets what, without regard to your wishes or your heirs' needs.
Probate is the legal process that inventories and distributes a person's property after death. Many people aim to avoid probate because it is time consuming and expensive.
When you can't control your financial life, make sure someone you trust will by assigning power of attorney. No one is immune from aging or the loss of mental clarity that may come with it. And you're never immune to health crises that may leave you unable to handle the business of your life: paying bills, managing investments or making key financial decisions.
A Medical Power of Attorney is used when you become unable to make healthcare decisions for yourself. For example, if you are unconscious after a car accident and you need a blood transfusion; if you are under anesthesia and you need to have a more extensive procedure than you initially consented to; or if you become mentally incompetent as a result of Alzheimer’s disease and you need medical treatment..
Every four minutes someone dies unexpectedly in the United States—not from age or sickness but unexpectedly. Lack of preparation needlessly adds cost, effort and distraction at a time when your family should be focused on mourning your loss.
A will is basically a letter of instruction to the court about what to do with your property after death. A will can do nothing until you are dead. Every will must go through probate. There is no exception.
Probate is the legal system’s solution for what happens to someone’s property after they die. The court determines whether there is a valid Will and appoints someone (the “personal representative”) to manage the estate. The Notice of the probate is given to the public and to creditors and the assets of the estate is determined. Creditors are paid and assets are disbursed to the heirs named in the Will or according to the priority established by law. Finally, documents are filed with the court to close the probate.
Probate is public so your affairs will be public records. Creditors or disgruntled family members can easily dispute, disrupt and delay the management and disbursement of the estate. Probate always involves the court and limits what your loved ones can do. Probate takes at least four to eight months but sometimes years. Probate can be expensive, especially if it is contested. Probate always costs much more than preparing a trust centered estate plan.
Joint tenancy is a type of joint ownership in which the entire asset is transferred to the one joint owner upon the death of the other joint owner. It is true that this transfer does not require probate but if both owners die at the same time or if the second joint owner dies without proper planning, then probate will still be required.
When you add a joint owner you lose control of your property. If the joint owner is sued, the judgment will be a lien on your property. Joint tenancy often results in greater taxes. If the joint owner becomes incapacitated or a judgment is entered against the co-owner, you may end up controlling the property with a stranger. Joint tenancy does not allow the transfer on death to be flexible to account for future changes in your circumstances. It is not simple or easy to make wise decisions about joint tenancy. By the time you and your lawyer work through the possibilities and probabilities of the future it would have been simpler, easier, and more effective to have created a trust centered estate plan.
Guardianship and conservatorship are the legal system’s solutions for what to do with a person who cannot make decisions regarding themselves or their property. A guardian has to report to the court and family members about the decisions that are made, usually for the rest of the person’s life. Therefore, being appointed guardian and reporting take time and money.
A “power of attorney” is a document in which you appoint someone to act for you. If it is “durable” that person continues to act for you even if you lose the capacity to make your own decisions. Durable powers of attorney are powerful legal documents and can be very useful, especially when they are part of a trust centered estate plan.
A trust is an agreement to hold property for the benefit of another. The law treats a trust as a separate legal “person.” Like a will, a trust can contain provisions for distribution of your assets to your loved ones after you die but the assets are distributed without probate. While you are alive you maintain possession and control of your assets. A revocable living trust is simple, convenient and affordable.
No. Trusts have existed for hundreds of years. They are so powerful that Teddy Roosevelt was elected as a “trust buster” to break up the powerful trusts used effectively by the extremely wealthy of the day. What is relatively new is using trusts to benefit people of more ordinary means.
Unlike a will, a trust can own property. And, the trust doesn’t die when you do. Instead, a successor trustee automatically replaces you and begins to manage the assets owned by the trust. The successor trustee can also distribute the assets to your loved ones. For a will to be as powerful as a trust, it must create a trust upon your death. To do so requires court involvement.
If you become incapacitated, a successor trustee replaces you and manages the assets owned by the trust.
You do. As the grantor and trustee of the trust you have absolute control over your assets. You can continue to use them, sell them or even borrow against them.
Real property is transferred to the trust by deed. Money in bank accounts will be transferred to the trust upon your death when the trust is named as “P.O.D.” (“Paid on Death”). Life insurance, 401K, and other accounts will be transferred to the trust when the trust is named as a beneficiary.
It takes much less time, effort and money than it will take to deal with death and disability if you do not prepare. You will meet with the lawyer to discuss your needs, desires and particular circumstances. The lawyer will prepare the documents. A few days later you will meet again to sign the documents.
Usually, your spouse will control your assets. If you don’t have a spouse, a successor trustee, someone of your choosing, will control your assets.
A trustee should be honest and responsible. No other particular qualification is necessary. A trustee does not have to be an accountant or a lawyer. Often, the best choice is a child or sibling. You should name a successor trustee in case your first choice cannot serve. Your lawyer will help you make the proper choice but the choice is yours.
After you die your trust can continue to be managed by the trustee you selected. The trustee will distribute assets according to your direction. For example, the trust can hold assets for a child’s education or for a child who is not ready to manage the assets himself or for a child with disabilities. You can direct the trustee to do just about anything you want with your assets.
The Congress may change the taxes, so ask your lawyer. If the law changes or your estate is larger and you are married, special provisions in your trust can still protect your estate from taxes.
Absolutely! Would you want a surgeon to remove your appendix or would you figure out how to do it yourself from a book or the internet? Therefore, comprehensively plan for whatever the future may hold takes competent legal counsel and experience. It is inexpensive and much less costly than mistakes.
A trust centered estate plan includes a particular type of will called a “pour-over” will. In most cases the will won’t be used. If it is used, it puts all assets into your trust. Your trustee can then distribute the assets to your loved ones, as you directed.
A living will directs physicians to stop life support that is unnaturally keeping you alive if your condition is terminal. It shifts the burden of decision from the health care provider to you so that your wishes can be followed without inappropriate delay.
This gives someone else the ability to make health care decisions for you if you are unable to do so yourself. Therefore, preventing delay.
It is a plan prepared by an experienced lawyer that includes a revocable living trust, pour-over wills, durable powers of attorney, living wills, health care directives and deeds. It should be comprehensive, administratively easy and affordable.
Ask the right questions:
• How long have you been practicing?
• How many trust centered estate plans have you prepared?
• Have your plans been tested in the crucible of death?
Don’t wait another day! Schedule a FREE, no-obligation estate planning consultation today with one of our attorney. We help ensure that clients pass their money/assets to their beneficiaries efficiently and optimally according to the decedent’s wishes. If you do not have an estate plan, it is of the utmost importance that you put one in place before it is too late. If your current estate plan is out of date or was drafted in another state, it may require updating. In either case, you can rely on our experienced will, trust and estate planning team. Developing an effective estate plan can be very challenging, as each client has a unique set of assets and unique family, business, and financial concerns.
The estate lawyer's role is to help their client arrange his or her financial affairs so that upon the client's death, the client's assets are distributed exactly as he or she wishes and the tax consequences of distributing the property are minimized.
Our attorney interview clients concerning their wishes, conduct a thorough analysis of their clients' personal assets, and then provide recommendations. After reviewing the recommendations with the client, we drafts estate planning documents which may include one or more of the following:
• Complex and simple wills;
• Revocable living trusts;
• Durable financial and medical powers of attorney;
• Advance health care directives and living wills.
Our Goal: Meeting legal needs of seniors and elders of various ages, family situations, health, wealth and asset status, and their concerns. Short- and long-term collaboration with clients, colleagues, and other professionals; meeting and consulting with family members, health-care and personal care providers as necessary; formulate, determine, maximize all professional resources to draft, assign, review, and manage the preparation of documents as necessary and appropriate: Simple and complex wills and trusts, deeds and other related documents and agreements
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