Put Your Trust in a Trust

Now is a great time to evaluate how using a trust can help you achieve your financial goals. The federal gift tax and estate tax laws give big incentives for using trusts in estate planning. In the pasts, trusts have been used mostly to transfer gifts to children while limiting estate taxes on wealth, but there are numerous other benefits.

Put Your Trust in a Trust
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An appropriately funded trust can help ensure that your assets are protected and available in the event that you become incapacitated. When you pass away, that same trust can be used to pass on assets to your beneficiaries. You can also protect your legacy by keeping your assets away from any of the heir’s creditors, too.

There are probate savings and privacy reasons that a trust can benefit you, too. There are potentially large fees for going through probate and your probate records will also be public. Putting your assets into a revocable trust instead can keep them from having to go through probate at death- therefore protecting you and your family’s privacy.

Finally, trusts can be a good tool when you live in a state that has an estate tax. Some states levy estate taxes that are rather substantial, but trust planning is one way to cut down on how many estate taxes will be levied on your death. This can also be a good tool for those who have real estate located in a state that imposes estate taxes.

EZ Legal Services: Shortcut or Risk?

Despite the marketing that’s attempting to penetrate just about everywhere these days, there’s a lesson to be learned from online programs that make estate planning seem so easy. And the lesson isn’t that you can save money and time by putting it together yourself. Up front, you may very well save some money and time. Just don’t be surprised when those “plans” don’t hold up in court. Just ask the family of Ann Aldrich.

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Aldrich used one of these easy programs to put her will together back in 2004. In the will, neither of her two nieces were actually mentioned. Jump to the present and both those nieces were able to capitalize on their aunt’s poor planning. The Florida Supreme Court recently ruled in favor of the nieces because the will was missing the important residuary clause, allowing all money acquired by the aunt after 2004 to be distributed through intestacy (the same laws that govern property distribution for those who pass away without a will at all).

Aldrich’s will included statements leaving everything to her sister and then her brother. Since the sister died first, the brother argued that he was entitled to everything. Since the “oh so easy” legal form only accounted for listed items, nieces were able to argue their rights to assets not specifically outlined in the will. Although Aldrich’s intentions appear rather clear, her documentation was missing something that an estate planning attorney would have picked up at first glance. Unfortunately, this meant that her wishes were not carried out as she planned. This situation was entirely preventable with a little bit of planning. If you’d like to ensure that your estate planning documents carry out your wishes clearly, set up a consultation by calling 732-521-9455 or emailing info@lawesq.net

Showdown: Wills vs Trusts

Depending on who you talk to, your estate planning specialist might recommend wills over trusts or trusts over wills. Let’s walk through some of the differences between these two planning tools to see if one might be a better fit for your needs.

Showdown Wills vs Trusts
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If you are planning to use a will as your primary tool, bear in mind that your assets must first go through the probate process in order to be eventually received by your beneficiaries. Some states have lengthy and cumbersome probate processes, meaning that it could take your beneficiaries a while to actually receive the assets. Probate is also very public, meaning that details about your financial situation will be shared in a less-private forum. If you’re concerned about this, a trust might be a better option.

In comparison, trusts tend to pass by the court system for the majority of the administrative process. Since these are privacy documents, there’s less public scrutiny into your finances or your plans, and some clients prefer this confidential approach. Unlike wills, which become active on your death, a trust can be rendered effective immediately. Additionally, trusts can also be used for incapacity planning, adding another layer to their usefulness.

Both wills and trusts can do tax planning for credit shelter trusts. The bottom line is that it depends on your needs. If you are not concerned about the red tape of the probate process, there are still advantages (especially regarding privacy) for the establishment of a trust. We work with clients to create a customized plan for you since we recognize that each client is unique. To talk more about the kinds of trusts we can help you establish or to begin generation of your will, contact us today at 732-521-9455 or through e-mail at info@lawesq.net

Risky Do-It-Yourself: Wills

Software or online programs to help you plan your estate are popping up everywhere, but that doesn’t mean they are the best choice for your needs. Many of these programs lead you to believe that generating your will is easier than it truly is. Heirs might find out too late that your self-created will doesn’t really match up with your state laws or even your own intent.

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When it comes to estate planning, intent is everything. Too often, the wishes of an individual don’t come across clearly in self-generated wills. Many modern court cases have focused on the determination of the testator’s intent, but judges are hesitant to cross certain lines to clear up confusion. As a result, your heirs may discover that your wishes aren’t carried out as you planned at all. Simply put, doing your will on your own can have big consequences.

Consider the Estate of George Zeevering. Last fall, a Pennsylvania appellate court was evaluating an unclear DIY will. Since the testator had not worked with a lawyer to generate the document, which was incomplete, it was difficult to determine the true intentions of Mr. Zeevering. In one aspect of the case, property had already been titled in the names of a son and a decedent as joint tenants. Mr. Zeevering stated that “the failure of this will to provide any distribution” to his daughters was done on purpose.

The case got sticky when the residuary and residuary estate totaled over $200,000 after debt payments were made. There was no provision within the DIY will for what should happen to those assets. In the end, the court determined that when a will doesn’t provide for the disposal of an entire estate and fails to include a residuary clause, the residuary estate must be divided under intestacy laws.

This case is but one example of where estate planning on your own can go wrong. Although it may not have been Mr. Zeevering’s intention to distribute the remainder of his estate under intestacy laws, that’s what happened. Despite his wishes, the law overrides an incomplete or improper will. While online and computer programs argue that wills and estate planning documents are easily done on your own, that minimizes the true complexity of document generation and estate laws.

Estate planning can be very complicated for an individual but it’s easily done under the guidance of an estate planning attorney. An added benefit of using a legal professional “in the know” is that he or she is clued into state and federal laws about estate planning, which always have the potential to change. An estate planning attorney is an excellent resource for all your questions as well as giving you the peace of mind that your estate will be carried out in the manner you wish. Cutting corners with a do it yourself tool is your choice, but do so at your own risk. If you want the assurance of totality and legality, contact an estate planning professional today.