Table Of Contents
Estate Planning – Wills & Trusts
Estate planning is the process of deciding how you want your assets distributed upon your death.
It includes writing a will, creating a trust, and establishing other legal documents. Having the best legal counsel for Estate Planning, Wills & Trusts will help you significantly.
The decision to create a will or trust should be based on your individual needs and circumstances. Choosing the right plan can make a big difference in how your assets are distributed and how much tax, legal fees, and court costs you may pay.
Wills
Wills are a critical element of any estate plan. They outline how your assets should be managed in the event of your death and specify who you want to be responsible for ensuring that your wishes are followed.
Wills can be written and prepared by you or a professional. A trusts and estates attorney is usually the best choice, as they will make sure your wishes are properly worded and in accordance with your state’s laws.
A will can be as simple or as complex as you choose. It can be used to name an executor, appoint guardians for your minor children or direct the distribution of your property and charitable donations.
A will can also be used to protect your assets and avoid the costly, time-consuming probate process. Regardless of the type of will you use, it’s a good idea to keep it in a safe place where your family members can access it if they need to.
Living Trusts
Living trusts are often used to save estate taxes and to minimize legal costs after an individual’s death. They can be revocable (meaning they can be changed or amended) or irrevocable (meaning they cannot be changed).
In a living trust, the grantor transfers assets to a trustee, who is responsible for managing those assets on behalf of the beneficiaries. In addition, the trust document provides for a successor trustee, who takes over the management of the property when the grantor dies or becomes incapacitated.
The main benefit of a living trust is that it bypasses probate, allowing the distribution of assets after death to occur smoothly and quickly. Probation is a lengthy process that can result in expensive court costs and attorney fees.
Charitable Trusts
Charitable trusts are an important tool for estate planning, as they allow you to give to charity while maximizing your financial benefits. These trusts can also help you avoid tax liabilities and reduce your taxable estate.
A charitable trust is an irrevocable legal entity that you establish to hold and manage assets. Depending on the trust type, the trustee receives funds from the trust and disburses them to beneficiaries according to the terms you set in the trust document.
For example, a charitable remainder trust (CRT) distributes a percentage or fixed amount of income to the beneficiary during a certain period of time (e.g., your lifetime) and the charity you have chosen receives the remainder at the end of that term.
Another type of trust is a charitable lead trust (CLT). Here, you donate money to the charity in the short term, without needing an annual income stream during that period. Eventually, the value of the assets in the trust increases and the charity receives the remainder at the end of the term.
Power Of Attorney
A power of attorney is a legal document that allows you to name someone you trust to act on your behalf if you are unable to manage your affairs. This can be a spouse, close family member, or friend.
Often, a General Power of Attorney is included in a comprehensive estate plan to ensure someone is appointed to handle your finances if you become mentally or physically incapacitated. It also is a great option for someone who is traveling for an extended period of time or has an illness that makes them temporarily unable to sign documents.
Another common power of attorney is Financial Power of Attorney. This type of POA allows the agent to make any financial decisions, including giving gifts of your assets to themselves or others you choose. Be sure to discuss with your attorney the limits of this gifting power.
Read Also:
