What is "Estate Planning"?
- legal documents created in advance of disability or incapacitation and death
- planning for the future
- instructions to survivors-heirs and beneficiaries
- one of the most important steps that one can take in life
- a gift to you and the people you love
Your estate consists of everything you own at any point in life and at death, regardless of size or value, ie., motorized vehicles, real estate, financial accounts, stocks and bonds, life insurance, retirement plans, antiques, artwork, furniture, businesses, and other investments.
Why make an Estate Plan?
It is not for just the rich. Virtually every competent adult should make an Estate Plan (Plan) to protect their estate (assets), themselves, and their loved ones should they become disabled or incapacitated, and when they die. Moreover, you brought nothing into this world - i.e., cars, bank accounts, personal
property, real estate, etc. - and you won't be taking
them with you when you die. Therefore, you need a formal "plan" to distribute your assets, i.e., vehicles, financial accounts, stocks and bonds, life insurance proceeds, real estate, etc., when you depart this life; to protect you should you become disable or incapacitated; and, to protect the rights of your beneficiaries if you become disabled or incapacitated and when you die. Also, it can avoid probate, guardianship, serve to minimize the family confusion, disputes, and discord
that generally occurs when there are no written instructions to loved ones about who is in charge, who
is to receive what, etc.
Last Will & Testament (Will)
It is a legal document that designates someone (Executor) to manage your estate when you die; appoints someone (Guardian) to care for a minor child, if any, if both you and the other parent are deceased; and, instruct the court and world about how your possessions are to be distributed after your death. However, it does not avoid the slow and expensive probate process. Moreover, if you die without one (will), someone other than you will make those important decision for you, i.e., state laws, probate court.
Revocable Living Trust (RLT)
A Revocable Living Trust (RLT) is an alternative to a will and is valid in all 50 states, including, the District of Columbia. It's major
advantage is the ability to avoid the lengthy and expensive process of probate, and especially if you own real estate in more than one states. Generally, you appoint yourself as the trustee and transfer your possessions to it during your lifetime for your benefit. After your
death, ownership of your property is passed on by your successor trustee to your
beneficiaries, generally, without the need for lawyer's fees or court filings. And, unlike a will which proceedings are public, the terms
of a revocable living trust can be kept completely private. The exception however, is where you choose not to transfer certain property into the RLT . In that cases, you will need a will to assign those specific possessions to the
beneficiaries you designate.
After creating a RLT you will need to fund it - make sure that you title assets in the trust's name. Once funded, it will continue on until you revoke it or it is distributed under its terms. Nevertheless, many people do not “fund” their living trust. But, establishing a RLT and then failing to fund it is a waste of time and money, leaving your assets exposed to expensive and lengthy probate.
If you are not sure whether you should make a "will' or "RLT", we will discuss the benefit of doth during your consultation; and, based on your particular circumstances we can assist you with making the right decision.
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