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A will is a document where you name a personal representative or executor. Wills name the person who collects all of your accounts and property, pays your outstanding debts, and distributes your money and property to those you have named, specify who will receive your accounts and property, and name a guardian for any minor children.
A living will, also known as an advance directive, is your lesson plan for communicating your specific wishes regarding end-of-life decisions. Carefully considering your desires regarding life-prolonging procedures and clearly communicating them to your chosen medical decision-maker is imperative
A revocable living trust (RLT) is a trust you create during your lifetime. You can change this trust at any time until you become incapacitated (unable to make your own decisions) or die. An irrevocable trust is a type of trust that cannot be modified or revoked once it is created. This means that once assets are placed into the trust, they are no longer considered the property of the grantor and cannot be taken back
A revocable living trust is a great foundational tool to save time and money and maintain your and your loved ones’ privacy after you become incapacitated or die. However, because you, as trustmaker, would typically serve as the initial trustee and have the power to change or revoke the trust, there is little that can be done to shelter the trust’s accounts and property from your personal creditors. The trust is merely an extension of you.
If you are concerned about protecting your accounts and property from your creditors or lawsuits, there are other types of trusts that can be used. These trusts would typically have someone else act as trustee and restrict the amount of authority you have to manage the trust’s accounts and property. In some cases, the trust may even restrict your ability to benefit from the trust’s property. Protecting your accounts and property usually requires that you give up control, so you must think carefully before implementing this type of strategy. It is also important to note that if you know that you will be a party to a lawsuit or have a creditor trying to collect a debt, it is too late to move money and property into a trust. Asset protection tools need to be put in place before any troubles occur, or else you could be guilty of making a fraudulent transfer in an attempt to defraud creditors.
Yes, you can include pets in your estate plan. It’s important to determine who will care for your pets and to decide if you need to set aside funds to care for your pets as well.
Selecting a caregiver for your children in case you are unable to do so is a tough decision. While no one can match your love for your kids, it is important for you to choose their guardian rather than leaving it up to a judge. If you do not designate a guardian, the judge will decide based on state law and the guardian’s courtroom demeanor, lacking the personal knowledge you possess about the potential guardian.
When picking a guardian and alternate guardians, think about if they share your beliefs regarding religion, do they have experience raising children, can they handle the financial and time commitments, do they have the physical health and stamina to take on this responsibility, and if your children will have to move to a different state.
An ethical will is a document that explains why you have made estate plans the way you have. It is not a legally binding document, it is not used in probate court, nor does it divide your assets the way you want. It is mearly an expression of your wishes and your intentions.
After you have finished your estate plans you need to keep the original ink signed document, especially if you are going to have to probate the will. For trusts or powers of attorney, you can function with an executed copy.
No, your trust can not be challenged or dispute your wishes stated in the trust. One of the big benefits of doing a trust is that it is almost foolproof. It very specifically says who receives what when you pass.
Setting up an estate plan doesn’t have to be complicated or stressful. I like to start with an initial meeting to get to know you. After that meeting, I take about a week to do a draft of the documents. We do a follow-up meeting to review the documents together to ensure I know that you know what they say and make any changes you may have. It’s usually about 3 meetings. Some of my clients are done in about 3 weeks, others need more time. We work at your pace.
If you think there is going to be a fight over your estate you really need to nail down who is getting what and make sure that you avoid the fight.
It is important to plan ahead should you or a loved one become sick. One of the most important and easiest things you can do is to select a medical agent and set up your advance healthcare directive.
By taking a proactive approach to estate planning, you can ensure that the right individuals are chosen to protect your children based on their unique strengths. For example, someone with strong financial management skills but no desire for children may be best suited to be the trustee of your children’s trust. This individual can use their expertise to invest and manage any funds left for your children effectively.
Conversely, a loved one who is nurturing and caring but not as skilled with finances may be better suited to be your children’s guardian. This person can provide emotional support and guidance for your children, while the trustee can handle any financial matters as outlined in the trust. This strategic approach allows for the best possible outcome for your children’s future.
You should review your plan every year or so, especially after major life events such as retirement. When looking at your existing plan, the following are some important questions to ask yourself.
– Do you still own the same property or have the same account balances as when your plan was first created? What will the balances be at your death?
– Does your plan assume your children or other young beneficiaries are still minors?
– Does your plan rely on proceeds from an employer-provided life insurance policy?
– Do you want to change how much your beneficiaries inherit and how they receive their inheritance?
While most things can be transferred to a trust during your lifetime through a process called trust funding, there are some items or assets that cannot be transferred to a trust. First, your retirement account must be left with you as the individual owner of the account, and you then name a beneficiary to receive the account proceeds when you pass away. The beneficiary may be a spouse, child, charity, other individual, or your trust, depending on your situation. The account is transferred through a beneficiary designation. If the designation form is properly filled out, the transfer will not have to go through probate, protecting your beneficiary’s privacy.
Second, the vehicle you own and use for everyday transportation will likely be left out of your trust. Having a trust own this type of vehicle could make you a target of litigants, should you get into an accident and they see that a trust owns the vehicle. Most states have a way to transfer your vehicle at your death to your next of kin without court involvement.
Lastly, if you own a business interest, you may be prohibited from transferring it to a trust depending on the type of interest it is (stock, membership interest, partnership interest) and the terms governing the interest in the business’s operational documents. However, the business’s operational documents can direct what happens to your business interest at your death, and the transfer of the interest may occur outside of probate, maintaining your privacy.
Depending upon your circumstances, it may be advisable for a couple to engage separate legal counsel to assist with their individual estate plans. A good rule of thumb is that if there are aspects of your financial and family relationship that will likely cause severe contention and misunderstanding between you and your spouse, you could consider using separate counsel to help negotiate and resolve the legal and estate planning issues that intersect with these problem areas.
On the other hand, for those who are willing to communicate and resolve their differences, it may be possible to jointly engage legal counsel to assist with your estate plan. One of the advantages of jointly hiring legal counsel is that the attorney can act in some ways as a mediator and educator, helping you identify and craft creative solutions to challenges. Additionally, jointly hiring legal counsel tends to be a less expensive solution and communication tends to flow much more freely when fewer individuals are involved.
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