PLANNING YOUR ESTATE: The Essentials
WILLS AND LIVING TRUSTS
Wills and Living Trusts are the traditional tools individuals use to control the distribution of their assets upon death. A Last Will and Testament is a document that takes effect upon a testator’s death. It is enforced through a judicial process known as “probate,” where the court system monitors an executor during the administration of the estate. Through probate, the court effectively transfers title of the testator’s assets to the named heirs.
A Living Trust is a statutory alternative to a Will. A Living Trust takes effect while the trustmaker is alive and enables him or her to set out an effective plan for incapacity. At death, a Living Trust functions as a Will substitute by controlling the transfer of the trustmaker’s assets while avoiding the probate system. Through Trust Administration, a trustee effectively transfers title of trust assets to the named heirs. Some of the ways in which you can utilize living trusts in your estate planning include transferring financial accounts to living trusts, transferring real property to living trusts, and safeguarding an heir’s share of your estate with the use of sub-trusts, such as inheritance trusts and special needs trusts. Trusts can be highly customized to meet an individual’s family needs.
Lifetime planning can be especially challenging for those who manage their daily lives without close relatives to inherit their estate. For these individuals, a Living Trust is an effective tool not only for gifting or charitable planning, but also, importantly, for the care and the management of assets during incapacity. Incapacity planning is taking on increasing importance for everyone, as we age and live longer than the generations before us.
PROTECTION FROM UNFORESEEN CREDITORS
We provide clients with the tools they need to protect their hard-earned assets from various unforeseeable creditors, including business creditors, tort creditors, divorce, and nursing home costs. These tools often include limited liability companies, irrevocable trusts, counseling as to asset structuring, and assistance restructuring assets to maximize eligibility for Medicaid and other government benefits.
SPECIAL NEEDS TRUSTS
For your beneficiary with special needs or challenges, we can design and implement trusts that are structured to prevent his or her disqualification from available public and private benefit programs. In particular, we can create trusts that are “non-countable” for Medicaid and public benefit purposes.
SPOUSAL TRUST PLANNING
For couples who require traditional trust planning, we develop plans to maximize the assets that pass tax-free to beneficiaries and to defer taxation as long as possible. Our estate and gift tax planning strategies include: community property trusts; credit shelter (“bypass”) trusts; special trusts for life insurance, personal residences, and other assets; and charitable giving.
PLANNED GIVING
For clients who are charitably inclined, we can design an estate plan that provides for your church, school, or other cherished causes in the most efficient way, taking into consideration both tax and non-tax factors. This aspect of estate planning can be especially important to those who may not have close relatives to inherit their estate.
BUSINESS PLANNING
We help you plan so that your ownership passes to those most capable of running the business after you are gone. In particular, we dovetail your business entity structure with your estate planning documents to ensure they work together. Additionally, we often utilize business entities for clients who are concerned with asset protection and death tax minimization.