Every person needs to do “estate planning” regardless of the
“small amount” or “large amount” of assets owned. Frequently good
planning is more important for someone with a nominal amount of
assets than for a ‘millionaire.’
Peace of mind is the goal when attorneys and clients work together
to plan an estate. Peace of mind means fully understanding your
options, making informed decisions and then obtaining legal
instruments designed to distribute your property according to your
wishes with the least possible taxes, expenses and delay that can be
achieved in your circumstances. Estate planning also includes
planning for disability, which may last for many years before death.
The following are some of the estate planning tools we use.
Wills
A typical disposition of a moderately sized estate can be handled
with a Will. Even a person with a small estate can benefit greatly
from having a Will.
A Will can provide for a self-proving affidavit that, in most cases,
will avoid the need to bring witnesses to court after death. You can
also provide for a Personal Representative, guardians for minor
children and trustees for assets passing to minor children and other
beneficiaries with disabilities.
Complex Wills
If you need tax planning, or if you have special needs or special
circumstances to be addressed, a Will can be drafted that is right
for you, including, as appropriate, bypass trusts, disclaimer
trusts, contingent trusts, special needs trusts for disabled
beneficiaries, trusts to protect beneficiary’s Medicaid benefits and
trusts to protect minor beneficiaries, financially irresponsible
beneficiaries, beneficiaries with bankruptcy or creditor problems,
or beneficiaries who may be abusing illegal substances or alcohol.
Trusts
There are many types of “ Trusts.”
1. The special needs trust is a useful
device when there is a desire to leave money for the benefit of a
person with a disability without interfering with their government
benefits such as Medicaid. This type of trust allows the person to
have many of the “extras” that the government will not otherwise
pay.
2. A knowledgeable Medicaid attorney can
assist in the creation of management trusts for personal injury
awards or other assets. These types of trusts preserve the client’s
qualification for Medicaid benefits or other forms of public
assistance.
3. A trust may be useful in saving federal
estate taxes (inheritance taxes). This trust is used in a married
couple scenario allowing the shelter of a large estate from federal
estate taxes. Failure to use it can leave families paying large
amounts of taxes unnecessarily.
4. Revocable or irrevocable living trusts
may be something you wish to consider if you desire privacy, own
property in multiple states or hope to avoid probate altogether.
5. Additionally, your estate, if large
enough, may justify the need for family limited partnerships, life
insurance trusts, or a regular gifting plan to take advantage of the
annual gift tax exclusion.
Property Not Subject to Will or Trust
Property held in joint tenancy is not subject to a Will until the
last surviving joint owner dies. Life insurance, IRAs, profit
sharing plans, etc. frequently are payable to a named
beneficiary(ies) and are NOT controlled or subject to a Will or
Trust.
Power of Attorney Documents
Proper planning should include a well-drafted set of Powers of
Attorney for financial matters, health care matters and mental
health matters.
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