Estate Planning
People avoid estate planning because they fear it’s an overwhelming process or reserved for the wealthy. The truth is nearly everyone can benefit from creating an Estate Plan. The alternative, leaving your future and distribution of your assets to chance or the courts, can create a tremendous burden for your loved ones as well as needlessly waste your hard-earned assets.
We will work with you to design an estate plan based on your goals, needs and overall family and financial situation. Everyone needs to plan for the future, from young families to retired seniors who want to ensure that their assets pass safely and appropriately. Families with children need to make provisions for guardians and future support of their children. Seniors need to set up plans to safeguard their assets for themselves and assure that their wishes are carried out.
Establishment of a trust avoids the expense and time associated with the probate process. The following concepts will help you understand the process.
Establishing a Trust. A revocable trust allows you to put your assets in a trust while you’re still alive. Most people name themselves as the trustee of their own trust. You will still have the right to buy, sell or give property as before, except the property is in the trust’s name rather than your own. A trust avoids the expense of probate and can transfer assets immediately upon your death rather than the year or more that most probates require. You will also appoint a successor trustee who is responsible for managing assets if you are unable or in the case of a joint trust, if neither of you is able, to manage assets. If your estate is sufficiently large you can incorporate tax-planning safeguards into your trust to avoid excess estate taxes.
Tax Planning. Your estate will have to pay estate taxes if its net value when you die is morethan the “exempt” amount set by Congress at the time. Estate tax laws have been in flux and noone is certain what is going to happen after 2011. We do not yet know what the exemption amount will be after 2011. The exemption amounts for 2010 and 2011 illustrate it’s variability:
*If you die in 2010 you will not pay any estate taxes at all.
*If you die in 2011 you will pay substantial estate taxes on any amount over $1M.
We expect new legislation which will clarify the rules after 2011, but nothing is certain as of today. We recommend tax planning for clients who have substantial estates. If this is an area you would like to pursue please let us know on the attached worksheet so that we can discuss further.
Appointment of a Guardian. If you have minor children you should designate a guardian tocare for them in case something happens to both of you. Consider a person whose philosophiestowards life and child-rearing are similar to yours and be sure to discuss your desires with yourprospective guardian to be sure that they are agreeable to shouldering this responsibility. Youshould consider the age and health of the prospective guardian and what assets will be available.Many parents supplement existing assets with life insurance. If your proposed guardian is not anideal financial manager you can always designate another person to manage the finances for thebenefit of your children.
Testamentary and Special Needs Trusts. A testamentary trust is an additional trust that youcan set up as part of your estate plan which appoints a testamentary trustee to manage assets forbeneficiaries until the beneficiary should be capable of managing assets on their own. A trusteecan keep the beneficiary’s money invested wisely and use it for their education, support, etc.You may designate when the beneficiary may receive distributions. We can also assist you insetting up a Special Needs Trust for a beneficiary who has mental or physical challenges. Pleaselet us know if you would like to discuss this option further.
Estate Plan. The trust itself is one part of your overall estate plan. In addition, we provide,
Asset Transfer Letters and Forms which provide all necessary information to your bank, stockbroker, insurance agent or other institutions where assets are located. These letters enable you to get assets transferred into your trust by simply filling in the blanks with pertinent information, delivering letters to appropriate institutions, and signing any forms required by them. We will also assist in transferring your real property. We personally handle transfer of real estate into the trust on behalf of our clients.
A Pourover Will which ensures that all property is transferred to the chosen beneficiaries through your trust, even if an asset is not transferred to the trust during lifetime. Your will name a personal representative to insure that your wishes are carried out.
A Durable Power Of Attorney which appoints another person, called a power of attorney agent, to handle financial affairs for you. This document is particularly helpful if mental or physical disability prevents a person from managing his or her own affairs.
A Health Care Directive which designates a health care agent to act on your behalf and which gives directions to physicians and family members regarding continuation of life support systems.
If you are interested in finding out more about creating a trust please call or email us to schedule a free consultation. All information submitted is held in total confidence and is used for estate planning purposes only. We look forward to working with you on this important project.