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Sadly, many individuals don’t engage in formal estate planning because they think that they don't have “a lot of assets” or mistakenly believe that their assets will be automatically shared among their children upon passing. If you don’t make proper legal arrangements for the management of your assets and affairs after your passing, the state’s intestacy laws will take over upon your death or incapacity. This often results in the wrong people getting your assets as well as higher estate taxes.

If you pass away without establishing an estate plan, your estate will undergo probate, a public, court-supervised proceeding. Probate can be expensive and tie up the assets of the deceased for a prolonged period before beneficiaries can receive them. (This firm has been involved in several of these types of cases over the past few years.) Even worse, your failure to outline your intentions through proper estate planning can tear apart your family as each person maneuvers to be appointed with the authority to manage your affairs. Further, it is not unusual for bitter family feuds to ensue over modest sums of money or a family heirloom. As an example, this office was involved in a case between a mother and daughter over the ownership of a used kitchen table and set of chairs owned by a deceased family member.

It is often said that an estate plan addresses "dead people and their things." But an estate plan can and should include much more. An estate plan can address care for the decedent's living minor children, and the decedent’s living spouse. The totality of issues you may want to address in your estate planning documents should be discussed with your estate planning attorney during your initial meeting, so that all of your wishes can be known and properly addressed.

Your estate is simply everything that you own, anywhere in the world, including:

• Your home or any other real estate that you own
• Your business
• Your share of any joint accounts
• The full value of your retirement accounts
• Any life insurance policies that you own
• Any property owned by a Trust, over which you have a significant control

A comprehensive estate plan should include the following documents, prepared by an attorney based on in-depth counseling with you, which takes into account your particular family and financial situation: a Trust, a Will, various Powers of Attorney, and asset transfer documents, such as quitclaim deeds. Each of these documents are discussed individually herein.

You would not select medical doctor or a dentist without knowing something about the experience that professional could bring in solving your medical or dental problem, would you? The same can be said for an attorney. Experience is key. Attorneys in this office have been serving clients in selected areas of law for more than twenty-three years. This level of experience gives you "battle tested" skills when it comes to estate planning or litigation involving a previous completed estate plan. Give us a call and let us discuss how we can best address your unique estate concerns.

It is the opposite of a “Irrevocable Trust”, and permits the grantor to change the Trust.

A Revocable Living Trust can be used to hold legal title to and provide a mechanism for the management your property. You and your spouse can be the Trustees and beneficiaries of your Trust during your lifetime. You may also designate Successor Trustees to carry out your instructions in case of death or incapacity. Unlike a Will, a Trust usually becomes effective immediately when you become incapacity or die. Your Revocable Living Trust allows you to make changes and even to terminate it. One of the great benefits of a properly funded Revocable Living Trust is the fact that it will avoid or minimize the expense, delays and publicity associated with the probate process.

An Irrevocable Trust is one that can’t be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the Irrevocable Trust, effectively removes all of his or her rights of ownership to the assets and the Trust.

Estate and tax considerations are the main reasons for setting up an Irrevocable Trust. The advantage of this type of Trust for estate assets is that it eliminates all incidents of ownership, successfully removing the Trust’s assets from the grantor’s taxable estate. The grantor is also relieved of the tax liability on the income generated by the Trust assets. While the tax rules will differ between jurisdictions, in most cases, the grantor can’t receive these benefits if he or she is the Trustee (manager) of the Trust.

For those with estates in excess of $5,000,000, a LIT may be a valuable tax saving option. There is a common misconception that life insurance proceeds are not subject to estate tax. While the proceeds are received by your loved ones free of any income taxes, they are countable as part of your taxable estate and therefore your loved ones can lose over forty percent of its value to federal estate taxes. An Irrevocable Life Insurance Trust keeps the death benefits of your life insurance policy outside your estate so that they are not subject to estate taxes. There are many options available when setting up an LIT. For example, LITs can be structured to provide income to a surviving spouse with the remainder going to your children from a previous marriage. You can also provide for distribution of a limited amount of the insurance proceeds over a period of time to a financially irresponsible child.

For those with estates in excess of $5,000,000, a QPRT may be a valuable tax saving option. Our homes are often our most valuable assets and hence one of the largest components of our taxable estate. A Qualified Personal Residence Trust, or a QPRT (pronounced “cue-pert”) allows you to give away your house or vacation home at a great discount, freeze its value for estate tax purposes, and still continue to live in it. Here is how it works: You transfer the title to your house to the QPRT (usually for the benefit of your family members), reserving the right to live in the house for a specified number of years. If you live to the end of the specified period, the house (as well as any appreciation in its value since the transfer) passes to your children or other beneficiaries free of any additional estate or gift taxes. After the end of the specified period, you may continue to live in the home, but you must pay rent to your family or designated beneficiary in order to avoid inclusion of the residence in your estate. This may be an added benefit as it serves to further reduce the value of your taxable estate, though the rent income does have income tax consequences for your family. If you die before the end of the period, the full value of the house will be included in your estate for estate tax purposes, though in most cases you are no worse off than you would have been had you not established a QPRT. An added benefit of the QPRT is that it also serves as an excellent asset/creditor protection vehicle since you no longer technically own the property once the Trust is established.

For anyone who has parent, child or sibling with special needs that depends on you for financial assistance, creating or making provisions for a Special Needs Trust is critical for ensuring that if something were to happen to you that financial resources would be made available to them without jeopardizing their government benefits (SSI). Without proper planning, your dependent could inherit your assets, become disqualified from their government benefits and then be forced to spend their inheritance before they can re-qualify for those benefits. Setting up or making a provisions for a Special Needs Trust is the first step in making sure they can both receive their government benefits and financial assistance from your estate.

Testamentary Trusts are Trusts that are based on instructions inside your Will; such Trusts are not established until after the probate process. They do not address the management of your assets during your lifetime. They can, however, provide for young children and others who would need someone to manage their assets after your death.

Young married couples without significant assets or children, who intend to leave their assets to each other when the first one of them dies, do not need a Revocable Living Trust and would not benefit from having a Revocable Living Trust. Other persons who do not have significant assets and have very simple estate plans also do not need a Revocable Living Trust. Finally, anyone who wants Court supervision over the administration of his or her estate should not have a Revocable Living Trust. The greater the value of your assets (particularly if you own real estate), the greater the need for a Revocable Living Trust.