Estate & Trust Planning
ESTATE & TRUST PLANNING
A Will or a Trust? That is the question we will answer for you should you contact us in assisting you in creating your estate plan. We offer a complete estate planning package and look forward to assisting you plan your estate.
While there are many types of trusts, the one we typically use in our practice is a Revocable Living Trust and is further discussed. Not all Trusts will suit the needs of everyone planning for their beneficiaries when they pass. A trust does not typically get filed and litigated in probate court and this is one of the greatest advantages of a trust, among others.
LAST WILL & TESTAMENT
When preparing a Last Will & Testament as part of your Trust, it is called a Pour Over Will which directs all of your assets to the Trust upon your death. In life, we get busy and maybe, forget to add an asset to the Trust. The Pour Over Will would be probated, but the only beneficiary of a Pour Over Will is the Trust.
If you choose to draft a Last Will & Testament as your distribution plan upon your death, the Last Will & Testament would then be probated through Probate Court of the County you reside and/or own property within. A Last Will & Testament can be as simple or detailed as you wish. The more detail you require, the chances are you will probably want to have a Trust.
POWERS OF ATTORNEY
Financial Power of Attorney (Durable Power of Attorney)
A financial power of attorney generally becomes effective upon signing or effective upon disability. It is generally a good idea to have a Financial Power of Attorney prepared when having your estate plan prepared. Most law firms will do this as part of the planning process. This form of Power of Attorney generally grants the designated Agent (person you want as your Power of Attorney) the powers to handle real estate matters, business matters, banking matters, life insurance and more. Our firm generally prepares this form under the estate planning process along with a medical power of attorney (otherwise known as a Patient Advocate).
Medical Power of Attorney (Patient Advocate)
A medical power of attorney generally becomes effective upon the physicians' signed disability certificate. Prior to disability at the time of creating the medical power of attorney, the Agent (person you want as your Power of Attorney or medical advocate) will need to sign an acceptance of the responsibility of the Agent. Some of the powers that are granted an Agent are the ability to employ and/or terminate physicians and other health care providers, consent to and contract for placement in a medical facility, nursing home or other medical facility and access to medical records. This is not the entire list and there are many powers for which an Agent may be granted.
ENHANCED LIFE ESTATE DEED (Ladybird Deed)
An Enhanced Life Estate Deed is one where the owner of the real estate (life tenant/grantor), transfers his/her real estate to another person (remainderman/grantee) upon death. During the Grantors lifetime, he/she retains complete control over the real estate and can sell, mortgage or modify the real estate during his/her lifetime without permission from the Grantee. Life Estate Deeds may also restrict the amount of control a Grantor may retain in the real estate and restrictions can be applied. For example, a Grantor can be prohibited from selling the real estate during his/her lifetime, but it is up to the Grantor to decide how much control he/she wants to retain. If he/she decides to retain complete control, then an Enhanced Life Estate Deed is the way to go. This also avoids the probate process.
An owner (Grantee) of real estate may grant real estate to another party (Grantee) reserving a life estate interest in the property of a third-party for their lifetime. An example: You own property (Grantor), your mother is living with you, and you deed your property to your child (Grantee), but you want to allow your mother to continue living on the property during her lifetime. Your mother would then get to live on the property until she dies, and then ownership transfers to your child. In this scenario, your mother could decline to exercise that right and move elsewhere, and then your child would own the property.
PROBATING AN ESTATE
A probate proceeding is commenced in the probate court of the county where the decedent lived or owned assets at the time of his/her death. It is important to determine whether or not the decedent had a will at the time of their death. This will determine how an estate proceeding is filed in the court. Testate proceedings have a Last Will & Testament; Intestate proceedings are without a Will.
Opening a probate estate can be accomplished without an attorney, however, it is highly recommended that you seek legal advice and the assistance of an attorney to guide you through the process. Each case is different and there are many details in each proceeding. In order to commence proceedings, you will need to know if there is a Last Will & Testament (an original is required), a copy of the death certificate, the names and addresses of any heirs of the decedent and an understanding of the estate's assets. If the original Last Will & Testament cannot be located, then a hearing will be required to admit the copy of the Last Will & Testament in its place. If there are any objections to admitting a copy of the Last Will & Testament, then there is a possibility it will not be admitted, and the estate will proceed as if no Last Will & Testament was created.
Probate” is a special court which handles certain human conditions like incapacity, mental illness, or death.
A revocable “Trust” is just a piece of paper which looks and reads a great deal like a conventional Will. But unlike a Will, a Trust has special terms which allow it to be revised while you are alive, then “survive” you and control your estate when you die.
“Probate avoidance” means structuring your assets so they will not go through the probate court process when you die. We only have to probate an asset if it is in the decedent’s name only, with no one else connected in any way. So, to avoid probate, we only have three tools to connect to another person: 1) joint ownership with survivor rights; 2) beneficiary designations; or 3) Trust ownership.
As Trustee, or manager, of your own revocable Trust, you are one hundred percent (100%) in charge of your own assets. No one else can control assets while you are alive and competent. Your management and tax returns will not change at all. You are still the boss.