Estate Planning

Estate Planning

Estate planning is an important step one should take to plan for the unexpected or tomorrow. A properly planned estate with an experienced attorney is designed to maximize your estate tax benefits, protect your loved ones from lengthy and public Probate proceedings and associated uncertainties. An Estate Plan drafted by a licensed attorney can ensure your estate is distributed and disposed of according to your wishes and not the Court.

An experienced estate planning attorney can consult with you and guide you through the process and advise you on how to properly distribute your estate assets upon death. We can also assist your loved ones on the proper administration of your estate to ensure the beneficiaries receive their inheritance per the terms of your estate plan.

REVOCABLE LIVING TRUSTS

A trust is a legal entity that can own property, much like a corporation is a legal entity that can own property. The trustee named in the trust document manages the trust assets, and can sell trust assets, invest the assets, collect income, and pay bills. The beneficiaries of the trust receive income and principal of the trust at the times set forth in the trust document, according to the instructions given to the trustee in the trust document. The “settlor” (sometimes called “grantor or trustor”) is the person who creates the trust. In estate planning, two types of trusts are generally used–“living trusts” and “testamentary trusts.”

LIVING TRUSTS AND TESTAMENTARY TRUSTS

A “living trust” is a trust which is set up while the settlor is living. A trust which is set up under the terms of a will, after the settlor’s death, is called a “testamentary trust.” In a living trust, the settlor usually acts as trustee as long as he or she is living and competent. The settlor of a living trust would change the legal title of his or her assets during his or her lifetime so that the trust, not the settlor, becomes the legal owner of the settlor’s assets. With a testamentary trust, assets are not transferred into the trust until the probate court directs distribution from the deceased settlor’s probate estate to the trustee of the testamentary trust, which usually occurs toward the end of the probate proceedings.

CERTAIN ADVANTAGES OF TRUSTS IN GENERAL

Either a living or a testamentary trust can provide estate tax and generation skipping transfer tax benefits. Both types of trusts allow the settlor to keep “strings” attached to his or her property after death by distributing assets to beneficiaries over a period of time or limiting distributions to beneficiaries only for certain purposes. For example, many parents do not wish to leave assets outright to their children if they are young, but prefer to have a trustee hold the assets and distribute them to the children only as needed until they attain one or more designated ages.

WILLS AND LIVING TRUSTS

A living trust is often called a “will substitute” because, like a will, it says what is to happen to property when the settlor dies. However, unlike a will (which only has legal effect after a person dies), the living trust also says that during the settlor’s lifetime, the trust property is to be used for the benefit of the settlor. A will controls all of a person’s property which is owned by a person in his or her own name at the time of his or her death other than joint tenancy property (which automatically goes to the surviving joint tenant), or property which passes by beneficiary designation (such as life insurance or pension plan proceeds.) The living trust controls only property transferred to it. A settlor of a living trust will try to transfer all of his or her property into the trust while he or she is still living. However, if some assets remain out of the trust, then after the settlor’s death those assets will be probated and the settlor’s will should direct that they will be added to the trust. A living trust is not treated as a separate taxpayer for income tax purposes during the lifetime of the settlor, and all income from trust assets is reported under the settlor’s Social Security number on the settlor’s own individual income tax returns.

BENEFIT OF TRUSTS

There are several benefits to a living trust over and above those which can be provided by a testamentary trust. Some of these advantages are summarized below.

• Probate Avoidance.
• Estate Plan Provides for Incapacity and May Avoid Conservatorship.
• Out-of-State Real Property.
• Maintaining Separate Nature of Separate Property.

ESTATE ADMINISTRATION

The death of a settlor will undoubtedly be an overwhelming and emotional experience for the survivors. Often times added to the grief of passing is the stress and anxiety of having to deal with technical and often complex issues related to distribution of the state, accounting and asset transfers that can be overwhelming. We will assist your loved ones with the process and absorb the stress and anxiety associated with the administration to make the process as easy as possible.