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We Specialize In:
The Four Pillars of a Successful Estate Plan
How to make an estate plan that will not fail Asset Alignment, Asset Verification, Updating & Instructions
In a magazine article Forbes reported that 70% of intergenerational wealth transfers fail. Presumably that statistic includes people who had wills, people who had trusts, and people who had no plan.
The First Pillar: Asset Alignment
Integrate Your Property With Your Plan
The estate plan is not complete until the assets have been re-titled in the trust name. One of the core components of a successful estate plan is ensuring assets are re-titled. The only way for an asset to avoid probate is to make sure it is owned by the trust, or to designate the trust as the beneficiary. Unfortunately, many people with revocable living trusts believe their estate plan will avoid probate but have failed to align their assets with the trust.
The Second Pillar: Asset Verification
A Trust Without Property Does Not Avoid Probate
Verifying assets is the second pillar in an estate plan that will not fail. Most attorneys do not assist clients with retitling assets as a part of their estate planning representation. Instead, they place the burden on the client to contact and deal with each bank, institution, human resources department, and insurance company. In most cases, the mountain of paperwork, institutional requirements, and institutions’ inability to easily process documents prevent clients from correctly aligning the assets with the trust.
The Third Pillar: Updating
Keep Everything Up To Date
We have reviewed estate plans that have not been looked at in forty years – and usually after something has gone wrong. Proper drafting, Asset Alignment, and Asset Verification are a good base. But updated is also necessary. The family and life events are not static. Things change. And with the changes in our family although the client may not recognize the legal solution, the estate planning lawyer will. Updating includes changes in assets, family situations, and the law that are integral to making sure the plan works and that family is taken care of. Only a process that keeps track of the changes in your life, but also controls the cost in terms of dollars and time to make those necessary changes and focused on results will take care of the family when it really matters – in a time of crisis, disability or death.
The Fourth Pillar: Instructions
Bring Together and Inform Key Participants
Understanding your estate plan is important. But perhaps more important is that those people who will play a role after you’re gone understand it as well. Your trustees, personal representatives, disability panel members, trusted people and professionals should be prepared and informed about your estate plan. Preparation does not mean disclosing assets or other sensitive information. The Instructions Book Pillar of estate planning gives those you trust the information necessary to execute your plan and allows them to clarify their roles before your death, disability, or any crisis which may call upon them.
Estate Planning Services We Specialize In
Health Care Proxy
A Health Care Proxy names someone – your agent – to make medical decisions for you when you are not conscious or able to make them yourself.
Power of Attorney
A legal document that allows someone – your agent - to make financial and legal decisions for you when you are not able to. This is different from the health care proxy that only extends to medical decisions.
Last Will and Testament
Your Last Will and Testament states where your assets go after you pass away – who gets what?
Your Last Will and Testament only applies to your estate. What counts as your estate? Your estate is only the assets, bank accounts and property that only have your name on it.
Joint accounts, joint ownership of any kind, even on a deed, life estates, life insurance policies, retirement accounts, in trust for accounts, pay on death accounts/ transfer on death accounts and any asset that has a beneficiary designation (you filled out a form at some point saying who gets the asset when you pass away) are not included in your probate estate – unless your estate is the named beneficiary – or if you forgot to name a beneficiary – then your estate is usually the default – each financial institution ha different rules that need to be confirmed when engaging in estate planning.
A private document that can either replace or supplement your last Will & Testament. There are various types of trusts depending on need. Trusts can avoid the court probate/administration process if completed correctly.
- An asset protection trust is another way to protect assets for Medicaid planning.
- An asset protection trust also protects the nursing home Medicaid applicant’s right to live in their house and tax benefits.
- An asset protection trust can also protect other assets, not just the residence.
- An asset protection trust protects from creditors other than Medicaid.
- An asset protection trust can also work the same way as a will to distribute trust estate assets after the death of the Medicaid applicant.
- Retirement accounts can be exempt in some states if certain criteria are met.
- An asset protection trust can still sell real property, securities and other assets owned by the trust if necessary. The sale proceeds stay protected in the trust.
- Revocable Trusts are used in place of or in addition to a last will and testament.
- Revocable trusts can be used to avoid probate/intestate administration. This means the court process to distribute a decedent’s assets to beneficiaries/distributes can be avoided.
- Revocable trusts are also useful when the Grantor becomes disabled. Successor trustees can step in to manage assets without court involvement.
- The Grantor, the person depositing their assets into a revocable trust can also be the trustee. This means the Grantor can still control and access all assets transferred to the revocable trust.
- Trusts are private documents. This means the public cannot see the trust document the same way a will can be looked up in a court.
- Revocable Trusts are useful when the Grantor does not want to include all beneficiaries of his estate.
- Revocable Trusts are useful when a Grantor’s is not aware of the whereabouts of their immediate next of kin. Heir searches and genealogy reports can be avoided since distribution of a trust does not involve the court process.
- Assets owned by a revocable trust are still treated as if the Grantor owns them.
- The Grantor can use all assets of a revocable trust however they wish.
- Assets owned by a revocable trust can still be accessed by creditors. To protect assets from creditors, irrevocable trusts should be considered if appropriate.