Wills and Trusts

Estate Planning

What is an estate plan?

Simply put your estate plan consists of the documents that reflect your desires for how your assets are managed and distributed when you are unable to manage same or upon your death. An estate plan typically consists of a Last Will and Testament, Durable Power of Attorney, Designation of Patient Advocate, and possibly a Revocable Trust.

Why is it important to have a Will or a Will and Trust?

Having a Will or a Will and a Trust is important for many reasons such as naming a guardian upon your death for any minor child, naming who will manage your assets and money for your child(ren), choosing the age that your child receives their share of the assets, and designating who receives your property and how it should be distributed.

If upon your death you have minor children and do not have a valid Will and/or Trust, the probate court will appoint a guardian for the care of the minor child and a conservator to manage the assets for the minor child. The court may not pick the person you would have chosen, your child will be in limbo until the court makes this appointment, the guardian and conservator will need to file annual reports with the court, and the conservator will need to obtain approval from the court to spend money for the child. The balance of the child’s share will be distributed to him or her upon the child’s 18th birthday, regardless of whether the child is financially responsible or not.

Deciding whether or not you need a Will or a Will and a Trust is an important decision that is based on many factors. Please schedule an appointment with me to review the differences between the two types of documents and to help you determine what is right for you.

Can I prepare my own documents using a form/template or online service?

The best way to insure your desires regarding your minor children and property are met is to have an attorney experienced, trained, and specializing in estate planning prepare your estate plan for you. Many forms/kits are confusing, which results in extra expense for an attorney or court to determine what the document is attempting to do or say. A form/kit may be completed improperly. Your desires may be misinterpreted by those administering your Will or Trust. Once you are deceased, if it is determined that your Will or Trust is invalid or confusing, you obviously are not available to be asked what you meant. I will assure that the documents are executed properly so that the Will or Trust will be honored as your set of instructions. Your estate plan will be customized to meet your needs, desires, and circumstances. I have over 20 years of experience and continuing legal education. I know the questions to ask, what to look for, and questions to listen for. A form is incapable of asking you all the necessary questions, nor can it follow-up with a question to your answer.

Can I list a child as a joint owner on my account or property?

I do not recommend naming a child as a joint owner on any account or property. There are lots of reasons NOT to name a child as a joint tenant on your accounts or real estate, below are just a few. If a child is listed on an account, and the child gets in a car accident, is sued, divorced, or owes money, then the creditors and/or former spouse of that child may be entitled to all of your money from that account. Adding a child on an account or real estate could result in you being unable to obtain Medicaid Nursing Home Assistance when you need same. If not done properly, adding a child as a joint owner on real estate could result in you losing your principal residence exemption. If not done properly, adding a child as a joint owner on real estate could make it difficult to sell that real property. If a child who is a joint tenant predeceases you, you may inadvertently disinherit his or her children.

If you want a child to be able to help you with your financial affairs, I can set up your estate plan to allow him or her to do so. A properly drafted estate plan should be able to meet all of your desires, without the negative aspects of adding the child as a joint tenant.

What is the cost for an initial appointment?

There is no charge for initial office conference to discuss your estate planning needs. I will provide options and recommendations for what services I can provide for you and the cost for same. If you desire for me to draft documents for you, another appointment will be set for you to come back to review and sign the documents.

What are the different types of estate planning documents?

Will: Formally known as a Last Will and Testament, a Will is a set of instructions prepared by a competent person that names who will be authorized to manage your assets after you die (the personal representative). A Will also directs to whom and how your assets will be distributed after you die. Upon your death the Will is put into effect by probating the Will.

Trust: A Trust is a set of instructions that names a person who can be authorized to act now or after you become unable to do so (the trustee). A trust will direct how the trust property will be managed during your life and after your death. Only property that is owned by a trust or paid into a trust is covered by the trust agreement. The Trust is already in effect upon your death, so the trust does not need to be probated and probate court involvement is not necessary.

Certificate of Trust Existence: The Certificate of Trust contains the information that third parties dealing with the trust and trustee need to know, such as who created the trust, who the trustees are, and the powers of the trustee.

Durable Power of Attorney: This document allows you to name someone to act on your behalf regarding your business affairs during your life. If you get in a car accident, have a stroke, or for any other reason are unable to make your own business decisions, you will need someone to manage your money and assets, including writing checks for you, paying your bills, cashing checks, dealing with your utility service providers and creditors. A person’s spouse can only act on behalf of the person if named in a Durable Power of Attorney.

This power can be granted immediately to the named person or this power can be granted to the named person only if you are unable act for yourself (springing).

A person that becomes unable to handle his or her own business affairs that has a valid Durable Power of Attorney avoids the need for the probate court to be petitioned for the appointment of a conservator. The attorney fees and court costs for conservatorship proceedings are much more expensive than the attorney fees for the drafting and preparation of a Durable Power of Attorney. A Conservator is required to file annual accountings with the probate court each year and typically will be required to obtain permission from the court before using your money to meet your needs.

Designation of Patient Advocate: It is very important for you to name an individual to make your medical decisions should you be unable to do so, including withholding or withdrawing life support (if you so desire). Only the person you properly appoint can act on your behalf. A person’s spouse can only make medical decisions on behalf of the person if the spouse is named in a Designation of Patient Advocate.

A person that becomes unable to make his or her own medical decisions that has a valid Designation of Patient Advocate avoids the need for the probate court to be petitioned for the appointment of a guardian. The attorney fees and court costs for guardianship proceedings are much more expensive than the attorney fees for the drafting and preparation of a Designation of Patient Advocate. A Guardian is required to file annual reports with the Probate Court.

Special Needs Trust: If your child or grandchild is receiving or will receive governmental assistance (SSI or Medicaid), a properly drafted Special Needs Trust needs to be part of your estate plan to prevent the beneficiary from having his or her benefits reduced or terminated. I have experience in these matters.

Estate Planning for Retirement Benefits

What special considerations need to be given for estate planning relating to my retirement accounts?

Traditional IRAs, 401k, 403b, and other retirement accounts contain pre-taxed dollars (dollars that have yet to be subject to income tax). All withdrawals are subject to income tax. There can be a great advantage of further deferring taxable events after you die. As a result, special considerations need to be given to naming the beneficiaries on those accounts. The considerations differ if you are married, if you have minor children, based on the number of children you have, based on the value of your assets outside of your retirement accounts, whether your children will have immediate needs, and other factors.

Circumstances may exist such that it would be advisable to delay the final distribution of those accounts for up to 10 years after your death or until your minor children are adults. There are times when the best course of action is to name your trust or estate as the beneficiary of your retirement accounts and other times that your children should be named. I will carefully review your assets, retirement accounts, family situation, and desires and recommend how your beneficiaries should be to best meet your circumstances and desires.