FAQ Wills, Trusts, and Estates

Everyone needs some form of estate planning, regardless of age, net worth, or marital status. If you have any assets to distribute, or if you have any concerns about who will care for you or your children in the event of your incapacity, then you should have an estate plan in place.

The basic estate planning documents include:

• A will: A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to name a guardian for your minor children. Even with a living trust a “pour over will” is required to cover any assets you may have acquired during your lifetime and accidently not put into your living trust. The living trust must hold title to the asset to control its disposition after your passing.
• A living trust: A living trust is a legal arrangement that allows you to transfer your assets to a trustee to manage for your benefit during your lifetime and for the benefit of your beneficiaries after your death.
• A durable power of attorney: A durable power of attorney is a legal document that allows you to appoint someone else to make decisions on your behalf for your personal convenience and if you become incapacitated. The scope and duration of the durable power of attorney is determined by you.
• A healthcare directive: A healthcare directive is a legal document that outlines your wishes for medical treatment in the event of your incapacity.

Probate is the legal process of distributing a deceased person’s assets to his or her heirs. The probate process is not always time-consuming and expensive if your estate planning documents are properly prepared. Inventories do not have to be filed as a public record, but must be provided to all heirs.

There are a number of ways to avoid probate, including:

• Creating a living trust: Assets that are held in a living trust will generally pass to your beneficiaries without going through probate. Even with a living trust a “pour over will” is required to cover any assets you may have acquired during your lifetime and accidently not put into your living trust. The living trust must hold title to the asset to control its disposition after your passing.
• Using beneficiary designations: Many assets, such as retirement accounts, bank accounts, investment accounts, and life insurance policies, can be transferred to beneficiaries through beneficiary designations. This will avoid probate as long as the beneficiary designations are properly completed.
• Titling assets jointly: If you own assets jointly with another person, as joint tenants with rights of survivorship, those assets will pass to the surviving joint owner upon your death, without going through probate. Without the “survivorship” designation you will be tenants in common and your will or trust will govern the disposition of your percentage of the jointly owned property. Most financial institutions will automatically include “survivorship. Know what you are signing when you set up financial accounts. It is easy to have unintended consequences. Pay on Death (POD) designations may be more appropriate for your situation or nothing at all. Every estate plan is different.

• Transfer on Death Deed: A Transfer on Death Deed leaves you with full control of your property until your death. After death, the named recipient(s) only need to file a death certificate to obtain ownership of your real property after your death. A Transfer on Death Deed must be recorded with the County Auditor prior to your death.

There are many benefits to having an estate plan, including:

• You can ensure that your assets are distributed according to your wishes.
• You can minimize taxes and other expenses.
• You can plan for the care of your minor children.
• You can protect your privacy.
• You can give yourself peace of mind.

The cost of estate planning will vary depending on the complexity of your plan and the experience of your attorney. However, estate planning is typically a very affordable investment in your future.

When choosing an estate planning attorney, you should consider:

• The attorney’s experience: Choose an attorney who has experience in estate planning law.
• The attorney’s fees: Get an estimate of the attorney’s fees upfront.
• The attorney’s communication style: Choose an attorney with whom you feel comfortable communicating.

Your estate plan should be reviewed at least every five years, or more frequently if you experience significant life changes, such as a marriage, divorce, or birth or death of a child.

Some common estate planning mistakes include:

• Not having an estate plan: This is the biggest mistake you can make.
• Failing to update your estate plan: Your estate plan should be reviewed regularly to make sure it is still up-to-date.
• Choosing the wrong Personal Representative or Trustee: The Personal Representative or Trustee is responsible for carrying out your wishes, so it is important to choose someone you trust and who is capable of handling the job. The term Personal Representative includes common titles such as Executor or Administrator.
• Not naming a guardian for your minor children: If you have minor children, you should name a guardian in your will to care for them if you pass away.
• Not making plans for your long-term care: If you have concerns about how you will pay for long-term care, you should discuss your options with an attorney or financial advisor.