Family fights, disgruntled heirs, costly legal fees, court costs and unnecessary taxes are some of the things a good estate plan will avoid for you.
Making sure you get peace of mind and that your assets will stay in your family and protected are things a good estate plan will accomplish for you.
A good estate plan will also provide the possibility for loved ones to help you get government benefits (such as Medicaid), if needed. Neutralizing threats is the goal.
Usually, a good estate plan will consist of a will, a trust, powers of attorney, and related documents such as beneficiary designations, deeds, agreements not to alter, and certificates of trust.
When you get this important work done, make sure that you have the opportunity to understand how the papers work and how every asset will pass and why. This will give you peace of mind.
We provide our clients with an in-person review of the papers so we can show them how the papers will work. Certain legal concepts need to be taught to you if you want to understand how the papers work and to get the peace of mind you want.
Assume, for instance, Jack and Jill have one child named Spencer, who has a wife named Tracy and a daughter named Jillian.
Jill has a child from a prior marriage whose name is Avery.
Jack wants everything to go to his spouse Jill, but on her death he wants to make sure it will go to Spencer in such a way that Tracy will never get it if they get divorced.
Ultimately, he wants what is left after Spencer passes to go to Jillian, and not to Avery.
Can this be accomplished? Yes, we can put Jack’s assets into his trust and direct that if Jill survives, the assets go into a trust for her benefit during her life, with a remainder to Spencer, in trust, and ultimately to Jillian.
Usually, we say if Jillian is under age 30, her share will be held in trust for her education and benefit until she attains age 30.
Assume also that Jack has a substantial IRA, and he wants some monies to go to Jillian right away if he passes. It would be a good idea to consider having some of his IRA to go into a trust for her benefit.
This would take advantage of substantial income tax deferral, as the money could grow in a tax-deferred environment. The required minimum distributions could be set over Jillian’s life expectancy, which can equate to substantial value for Jillian, over time.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate planning and elder law attorney. www.mwinnesq.com