Estate Planning Frequently Asked Questions

Why do I need an estate plan?

A well thought out estate plan ensures that your plans for your medical care, guardianship for minor children, and management and distribution of your assets will be carried out according to your wishes and not left to the State or others to decide.

What happens if I don’t have a plan?

The government’s estate plan is called Intestacy and your assets will be distributed under State law. These statutes almost never match how you would have divided your assets yourself. Documents to appoint an Administrator must be filed with the Probate Court and their approval must be obtained.

The court will appoint guardians for your minor children. The probate court may appoint a conservator to make decisions about your medical care if you are unable to do so. Without a valid plan all decisions about your estate will have to be approved through the probate court system.

What should I consider before I begin?
  • Who will be the executor of your Last Will
  • Who will be the successor trustee after you if you draft a trust
  • Who should be the Guardian for your minor children
  • Who will make financial decisions for you if you cannot make them yourself
  • Who will make health care decisions for you if you cannot make them yourself
  • How you want your end of life medical care handled
  • If you want to make any anatomical gifts at your death
  • How you want your estate to be distributed at your death
What’s the difference between having a “Will” and a “Living Trust”?

A last will is a written document that states who you wish to be the guardians for your minor children and how you would like your assets distributed at your death. The last will names an executor to facilitate the management of your assets during the probate process.

Trusts are a legal construct that allows you to create a separate legal entity to hold your assets. A trustee is named who manages the assets for the benefit of you and your beneficiaries. Revocable living trusts are created and funded during your lifetime and you often name yourself as trustee to maintain control of the assets until your death or incapacity. A testamentary trust is created after your death by a provision in your will. Trusts are very flexible and there are many different types. The type of trust used is dependent on your specific goals and circumstances.

A Living Trust offers protection should you become incapacitated by allowing your successor trustee to manage your assets without interruption. Please note that even with a Living Trust you should still have a will known as a “pour-over” will. These wills make sure that any assets, which may not be in your Living Trust at the time of your death, “pour-over” into the trust. Your Trust Package will include all of the necessary estate planning documents including a “pour-over will”.

How will I know whether I need a “Will” or a “Living Trust”?

We offer FREE email support to answer these types of questions. Based on your particular circumstances we can assist you with making the right decision.

If I set up a Living Trust, can I be my own trustee?

Yes. In fact, most people who create Living Trusts act as their own trustee. If you are married, you and your spouse can act as co-trustees. During your life, you will have complete control over all of the assets in your trust. In the event of your incapacity your hand-picked successor trustee assumes control over your affairs.

Is a Living Trust valid in all states?

Yes, a Living Trust is valid in all fifty states, plus the District of Columbia.

Isn’t a Living Trust only for the rich?

No. A Living Trust can help anyone protect his or her family. Any person with an estate large enough to require probate may derive meaningful benefits from a Living Trust.

Will a Living Trust save on Estate Taxes?

A living or a testamentary trust may help save on taxes in certain circumstances. The estate and gift tax laws are complex and fluid. Trusts are flexible vehicles that are often used in tax planning. Your individual situation will determine what trust type, if any will help best preserve your assets.

Will a Revocable Living Trust protect my assets should I have to go into a nursing home?

No. Because you maintain complete control over your assets titled in your Living Trust, those assets are considered available for your use should you have to go into a nursing home.

What type of Living Trust do we need?

There are a number of different trust types for a married couple; all of which are typified by the result after the first death. The factors which go into determining the correct type of trust are the size of the estate, the tax laws, the underlying ownership of the trust assets and the comfort level the couple has with the degree of control the survivor should have over the trust.

We are not married; can we still have a Joint Living Trust?

You have the option to prepare a Joint Trust along with all of the matching supporting documents for a “Non-traditional Couple”.

My spouse is not a U.S. citizen; are there any special problems?

Yes. A non-citizen surviving spouse can be required to pay substantial estate taxes at the first death if a proper estate plan is not in place. Depending on the size of the estate, it may be necessary to have your Living Trust set up as a “Qualified Domestic Trust” to avoid the payment of any taxes at the first death. The program will create the appropriate trust for you based on the information you provide.

What do I have to do after I create a Living Trust?

You need to make sure that you title appropriate assets in the name of the trust. Once a trust is created and funded, it will continue on until it is revoked or it is distributed pursuant to its terms. There are no on-going costs or fees to establishing a Living Trust; nor are there any separate accountings or tax returns required during your lifetime. IRS Regulations provide that a revocable living trust uses the tax identification number — your Social Security Number — of the Grantor as its identification number and no separate tax returns should be filed for the trust. Instructions on how to transfer or title assets into the name of the trust will be provided.

What should I do if I want to use your services?

Developing an estate plan is a smart and caring act on your part. Whether you use our service or someone else’s you are taking the first step to gaining control of your affairs and your loved ones will be very grateful.

This program is designed to make the building of a basic estate plan as easy and economical as possible. Completing the on-line interview yourself allows you to work at your own pace, ask yourself the important questions and see the plan come together.

It also allows you to save on fees as we do not have to enter the data ourselves. Please follow the instructions below to begin and we will be in contact with you as you proceed and when necessary.

  • You will complete a Registration Form and then log-in information will be sent to you by e-mail so you can proceed, and so we can contact you if there are any changes in federal or state law which might affect your trust;
  • You will login to the system and begin the interview process which will take you screen by screen through the context sensitive question and answer process. You can save your answers and come back at a later time to finish. At the conclusion of the interview, you will have provided all the necessary information to assemble a custom estate plan for your individual situation.

What happens with life insurance proceeds with a Clayton Election Trust? Is there a mandatory split of the life insurance proceeds?

No, you can leave it up to the trust. What if the trust is silent on what happens with the life insurance proceeds? The trustee and beneficiaries can decide what to do with it. It could go to the family trust for credit shelter, or half could go to the survivor trust, etc. They can decide what they want to do.

If you have a blended family, you may want to use the life insurance for the family trust, so it goes to the kids of the deceased.

How Do You Assign an LLC Interest to a Trust?

Assignment of LLC interest is similar to an assignment of personal property. You need a contract that says you are members of the LLC and own a percentage of the LLC, and by signing the agreement you are assigning your interest in the LLC over to the living trust.

Trustees sign the agreement, assigning the interest, then sign on behalf of trust, accepting the transfer. You don’t need all of the LLC members to sign this over, unless there is a specific requirement of such in the operating agreement.

What is a Special Needs Trust?

A special needs trust is a RLT (Revocable Living Trust) or ILT (Irrevocable Living Trust) that is taking care of a third party beneficiary with special needs. It can be set up by a court or by a third party. You basically just create a RLT with special needs provisions. You can do a separate RLT or ILT or include it in the general trust. An ILT could kick it out of the estate and give it asset protection right away. Typically, RLT’s always include special needs provisions for underage or incapacitated beneficiaries. If any of your beneficiaries have special needs or qualify under needs based care, the trustee is to hold their assets in a supplemental/separate trust.

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