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ESTATE PLANNING PUZZLES

Will and Trusts

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People who create their own estate plans often make the mistake of thinking that they only need to use one legal instrument and that it will take care of everything. This is usually a Revocable Living Trust. While a Living Trust is a great estate planning tool, it is probably not the only thing you need. Estate planning is more like putting a puzzle together to find the right fit between various legal instruments to effectuate your goals.

A Revocable Living Trust is only effective for the property that you transfer to the Trust. If you forget to transfer something or are unable to transfer something for some reason, than the Trust has no legal authority over that property. If you pass away before you can transfer everything into the Trust, the Trust will also not be effective. The normal solution for this problem is to execute a Pour Over Will. This is a very simple Will that directs that any property in your estate should be transfered to the Trust. That allows the property you didn’t transfer to be distributed according to the terms of the Trust.

There might be other estate planning instruments that you want to use with your Revocable Living Trust. Each person’s estate planning puzzle is different. An attorney can help you solve your puzzle.

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Yes, but no. When you have a fully funded revocable living trust, your final asset distribution is in your trust; and, technically, if you have all of your assets funded and no minor children, you don’t need a will. In this case, your trust is called a “will substitute.”

However, it is prudent to execute a pour-over-will, which is used to distribute any assets intentionally or inadvertently left outside your trust or any assets flowing into your estate at the time of your death, such as the repayment of debts or monies from a car accident or malpractice claim.

In addition, if you have minor children, the will, or the pour-over-will, is used to appoint guardians to raise and care for your minor children if you die.

If you die without a will, any assets not controlled by your trust or by beneficiary designation will be distributed pursuant to state intestacy laws and heirs, not of your choosing, may receive an inheritance.

In addition, if you die without a will and you have minor children, the court will decide who raises your children, not you.

The only beneficiary of your pour-over-will is your revocable living trust. If needed, it picks up any assets not funded into your trust, and pours them into the trust. This is done through the probate process.

It’s generally recommended that you fully fund your trust; this means that all of your assets are either titled in the name of your trust or their beneficiary designation has been changed to the name of your trust.

Because we discuss “trust funding” so often and stress titling all of your assets into the name of your trust, it’s easy assume that your trust owns the assets. In truth, the trustee of your trust owns the assets. While you are alive and well, the trustee is likely you so you maintain full control over your assets.

If you become incapacitated or die, your successor trustees own the trust assets and manage and distribute them for the benefit of your beneficiaries.

While, technically, some folks can go without a will if they have a fully funded revocable living trust and no minor children, it is not recommended. Execute a new pour-over-will anytime you update your trust.

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If you’re thinking about the estate planning tools that you want to utilize, you’ll likely consider the use of a living trust or a living will. It’s important to understand that these documents are very different and are used for different reasons. While not everyone may choose to create a living trust, most people choose the use of a living will. Take a look at the following information, to better understand these planning tools. If you have any questions, or if you’d like to create a living trust or a living will, contact an estate planning attorney.

What are the benefits of a living trust?

A living trust is a planning tool that allows you to accomplish a number of things. For one, it allows you to have full control over your assets during your lifetime, even during incapacity. Second, if used correctly, it also allows the assets in your trust to avoid probate. Third, you can include special needs planning, charitable planning, pet planning, legacy planning, asset protection planning, and bloodline protection planning in your trust.

Why would I want to use a living will?

A living will is an estate planning tool that allows you to make important end of life decisions ahead of time. If you become incapacitated and are in an irreversible coma or a persistent vegetative state, this document is used to determine the medical treatment that will be permitted and that which will not. Many people use this document to outline their wishes regarding the use of life support. If you don’t want to remain hooked up on machines in order to live, then you want to create this planning document.

Make sure that you understand the differences between these important documents. This will allow you to create a plan that fits in with your needs and goals. If you have any questions, or if you’d like to create a living trust or a living will, consult with a qualified estate planning attorney.

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JOIN US FOR A FREE WORKSHOP THIS WEEKEND TO LEARN THE FOLLOWING:

Elder Law and Medicaid Planning

Medicaid needs arise when you least expect them. Americans are living longer than before. At the turn of the 20th century, life expectancy was about 47 years. In the 21st Century, life expectancy has doubled. As a result, we face more challenges and transitions in our lives than those who came before us.

PROTECT your life savings.
INCREASE the amount of income of keep.�
AVOID losing your home.
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LEARN about Veteran’s Benefits.

Wills, Trust and Estate Planning

We know you want to pass your wealth to whom you want, when you want, the way you want, at the time of your death. If done correctly, a Estate Plan can help minimize estate taxes for a married couple and allow a trusted person to take over your care and finances during incapacity.

PROTECT your family.
AVOID probate delays and expenses.
SAVE estate taxes. Give your money to your family.
PRESERVE money for children or charitable causes.

Join us at our FREE Workshop this weekend. Our experienced attorneys will give you the information you need.

To register for the seminar, call our office at (718) 793-7000 , or register online!

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It is common for families not to talk about such things as what they will inherit when mom and dad is gone. This type of conversation can be uncomfortable for parents, and make children feel as if they are doing something wrong for even thinking about such things. As a result the subject is often swept under the rug until the time comes that there is no choice but to talk about it. This can lead to some major family disputes because children may be surprised at what they parents wishes really were.

To make this conversation easier for everyone involved, it is a good idea to think about estate planning as a way to show your family that you love them. If you have an estate plan in place, when you die your family will have much less stress to deal with.

The best thing to do with your estate plan is to not let it be a surprise to those that it will affect. If you let your loved ones know what you have in mind as far as their inheritance, there will be fewer problems later. Even if they don’t necessarily like what you plan to do, they will better be able to accept it if they hear from you that it is what you want.

Broach the subject with your family when everyone is together, even if you need to call a family meeting for that specific purpose. A big mistake is to talk about your estate plan during holiday gatherings, as it may ruin the holiday for some, and cause hard feelings. If your family is aware that they are coming together for the purpose of discussing this touchy subject, they will be better prepared to deal with it.

Once you have given your family an outline of what you will have in your will or trust, you can then ask for everyone’s input so that their opinions can be considered. Of course you will still create your plan in a way that you feel is best, but at least if your children and grandchildren are able to give you their input, they will not feel as if they simply never had the opportunity to talk with you about it.

It is true that discussing your estate and eventual death with your family is a very uncomfortable thing to do, but it is definitely a step you need to take to keep peace within your family.