Estate Planning

Wills & Trusts

No matter your net worth, estate planning is essential to ensure your financial goals are met after you pass away. Estate planning can help minimize disputes among family members, reduce taxes, shorten or eliminate the probate process, provide asset protection for beneficiaries, and provide you with the peace of mind knowing all this will be taken care of. Each plan is unique, but just about every plan includes either a will or a trust as the foundational piece of the plan. Both wills and trusts are instruments used to transfer your property to your beneficiaries after your passing.

A will is a legal document that directs the disposition of assets you own at the time of your death. You must choose someone to serve as the Personal Representative (executor) of your will. This person will be responsible for filing your will with the Probate court, paying your creditors, filing tax returns, and distributing the remainder of your property to the beneficiaries named in your will. If you have minor children, you need to decide who to designate as their guardian. The guardian will manage the money you leave for your children’s benefit, unless a trust is established.

For some, a will can accomplish their goals as the centerpiece of their estate plan.

For others, some type of trust is required to achieve their objectives. Trusts are also used to direct the disposition of your property after your passing, but provide more flexibility and more options than a will. There are a number of different types of trusts you can create, but the most common is a revocable trust, which can be revoked or amended at any time. For all trusts, you must choose someone to act as the trustee of the trust, which is typically yourself during your lifetime and either a loved one or a professional trustee for after your passing.

There are a number of benefits available through trust plans that are not available through will plans. One of the greatest benefits is the ability to avoid the probate process entirely, which means saving money and time during administration. Another huge benefit is providing asset protection on the inheritance left to your loved ones. This means their inheritance can be protected from their life circumstances such as divorce, bankruptcy, creditors, lawsuits, nursing home care, or even themselves (bad spending habits, substance abuse issues, etc.). Trusts can also provide an opportunity to reduce estate taxes for future generations.

If you have children, you will need to decide when you would want the trust property to be available for distribution to them. For those with minor children, the assets are typically held in trust until the youngest child has completed college or reached a certain age.

Irrevocable trust planning is also frequently used to protect assets from potential nursing home costs or to minimize estate taxes. Common irrevocable trusts include insurance trusts (ILIT), asset protection trusts, charitable trusts (CRT, CLT, CRUT, CLAT, etc.), and trusts for children and grandchildren (might be for educational purposes).

Each client is unique and no one technique works for everyone. The centerpiece of your estate plan will be determined by your goals, what type of property you own, and the value of your property.

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