If you are the owner of a vast estate, hiring good lawyers to establish an effective plan for you can give you peace of mind. It can also provide a certain degree of relief because you know that you have arrested a problem that will surface at a time when you can do nothing to resolve it.
Here are some of the best things that you need to consider when dealing with your estate plan:
1.Work With A Capable Estate Planning Lawyers.
Estate planning involves legal matters and the best people who can do it effectively are the ones who have the necessary qualifications to make it happen. Don’t ever attempt to do it yourself, as it will only mean trouble and thousands of dollars in court litigation expenses if it does not become a legal document. You should remember that invalid documents are not honored anywhere.
2. Appoint A Guardian
You should designate a guardian for your young sons and daughters. If you won’t do it, a judge will. He has the authority to appoint somebody who will take care of your children in case you die unexpectedly. Designating a guardian for your children can help to prevent your qualified relatives from fighting over the right to become your children’s lawful guardian. You also need to assign a backup guardian as a precautionary measure just in case your first choice can’t serve for any reason.
3. Plan Early.
It is always good to do estate planning while your wits are still intact. A mentally incapable person can no longer execute a will or estate plan. This makes life harder for you and your loved ones, most especially if they are still minors.
4. Supply Your Estate Planning Lawyer With The Necessary Documents.
You should furnish your attorney with the necessary documents and information to make your estate plan serve its purpose. These documents include deeds to your properties, divorce documents, shareholders agreements, and prenuptial agreements. Your failure to supply these documents can result in the failure of your estate plan.
5. Deal With Your Lawyer With Honesty.
You need to be open and honest to your lawyer about your plan. This will make things easier for him to construct, and make your plan work towards your intended goal. Do not withhold important information from him, such as a previous estate plan or plans that you intend to override with a new one. This will help to set things in their proper order, and avoid legal battles between your heirs.
6. Let Your Fiduciaries Know Of Their Appointment And Tell Them To Contact Your Lawyer.
Letting fiduciaries know of their appointment can help to ensure that the estate plan is in place. Assigning a fiduciary who doesn’t know about his appointment is disadvantageous to the estate plan. It can also create more problems if the designated person is not willing to serve or can’t be found.
7. Provide your Revocable Living Trust with complete funding.
You may not know it, but a Revocable Living Trust needs complete funding to prevent your assets from ending up in probate.
8. Conduct An Annual Review Of Your Estate Plan To Make Sure It Is Applicable.
If you fail to review your plan year after year, chances are some conditions may not be applicable anymore. You should see to it that your plan makes sense when it is needed. This will ensure that things are in their proper place at the proper time to avoid legal issues.
9. Choose The Best Fiduciaries For Your Beneficiaries.
Choosing the fiduciaries that can get along well with your beneficiaries is one of your best moves you can do to prevent the parties from future legal confrontations. They are supposed to be in good terms with one another. It is but logical to choose a fiduciary that your beneficiaries honor, respect and get along well with for your own peace of mind. You may need the expert advice of your lawyer to help you find the best trustee for your beneficiaries. Just be honest with him and things will work out fine.
Crossing State Lines With Your Estate Plan
Moving to a new home probably means making long lists of Things to Do. If you’re moving across state lines, be sure to add an Estate Plan Review high on the list. Even though each state must honor legal documents made in other states, each state makes its own laws for the formalities and substance of wills, trusts, powers of attorney, and health care directives. This can lead to some confusing consequences. In other words, your old will or power of attorney may be a valid legal document but it may not be applied as you would think because local state law differs from your old home state’s laws.
To avoid costly and time consuming court proceedings about which state’s law will apply, here is a short checklist for your estate plan after a move to another state.
Medical Directives
State laws differ widely on health care powers of attorney, physician’s directives, and living wills. Hospitals and doctors are most familiar with the medical directive forms under their state’s laws. When presented with documents created in another state there may be delays while their lawyers review the unfamiliar documents. So that a healthcare provider will not have any difficulty recognizing the validity of your document, it’s best to convert to documents under the laws of your new home state.
Last Will and Testament
Each state has its own rules about how wills are established and interpreted. There are important variations that are technical and that only a qualified estate planning lawyer will identify. For example, these technicalities may include who can serve as an Executor or Trustee; spousal inheritance rules; definitions of key terms; “default rules” if something happens that is not covered by the terms of the will or trust; estate or inheritance taxes; payment of claims; compensation for fiduciaries; and much more. A little attention now may avoid problems when a court has to interpret your will later.
Living Trust
Like wills, each state has its own laws governing trusts. Those laws were mainly judge-made laws for centuries. Development of law by judicial decisions instead of statutes enacted by state legislatures can take a long time and often lags behind current trends and issues. Thus, the development of the Uniform Trust Code. This is not a real law; rather, a set of model laws written by legal scholars, practicing lawyers, and judges who team up to provide a guide for state legislatures as they modernize and streamline state laws. Each state is free to adopt its own version of the UTC. If you have a Living Trust, the nuances of state laws on trusts — whether judge-made laws or variations of the Uniform Trust Code can significantly affect your inheritance plan. A review of your old trust by a qualified estate planning lawyer can identify appropriate amendments to allow full benefits under the new home state’s laws.
Property Power of Attorney
States are increasingly changing statutes that govern financial and legal powers of attorney. Your old document should compare to your new state’s laws to make sure there are no clashes and all relevant and available powers are included.
IRA’s
IRA’s are governed by federal law which applies the same to residents of all states. So why are they on this list? Because some states require a spouse to sign off on beneficiary designations for IRA’s, so make sure your beneficiary designations comply under your new home state’s laws.
Differences Between Executors and Trustees In Cedar Hills Utah
The terms executors and trustees are both used in estate planning. Before looking at the similarities and differences between these two estate plan administrators, let’s review the difference between a will and a living trust:
A will is a legal document directing the disposition of assets upon a person’s death.
A living trust is a legal arrangement under which property is transferred to a trustee to administer in accordance with the instructions of the person who sets up the living trust. A trust may continue for a long period of time – both before and after the death of the person whose trust it is.
Executors are named in a will to carry out (execute) your instructions after your death. If you only have a will and don’t have a living trust – the executor of your will is the one who will be responsible for getting your estate through probate.
Trustees are the people you name to carry out the instructions of your living trust while you are alive as well as after your death (someone you trust). As long as you are mentally and physically capable, you (and your spouse) may serve as trustee of your own living trust. When more than one trustee serves at the same time, they are referred to as co-trustees. Following your death (and the death of your spouse), successor trustees serve.
If you are married, after one spouse dies the surviving spouse can serve alone as sole trustee or can serve with a co-trustee. In living trusts for married couples, it is usually recommended to include the provision that, at the death of the first spouse to die, a successor trustee come on as co-trustee to protect the interests of the deceased spouse in case the surviving spouse remarries. Where a married couple has children from different marriages, it is sometimes recommended that a co-trustee from each set of children always serves together in order to protect the inheritance rights of both sets of children.
As you can see from the above examples, if done right a living trust can go a long way towards ensuring family peace. And if not done at all or done the wrong way, there are strong possibilities for major family feuds. If you only have a will, who you name as executor is very important because this person will have to deal with your estate going through probate. If, on the other hand, you have a living trust, your executor’s main duties have to do with funeral arrangements and expenses.
If you do have a living trust – your “pour-over” will puts everything in the trust. Thus it is the trustee who carries out the terms of your living trust after you die. To make sure things go smoothly, it is recommended that the executor and successor trustee named be the same person.
When considering who to name as executor and trustee as well as successor executors and successor trustees, keep in mind whether:
• the people you wish to name are trustworthy
• it is convenient for these people to administer the will and trust (one thing to consider is where these people live)
• they are likely to outlive you
• they will be capable of dealing with the administration of your estate, such as hiring lawyers, accountants, appraisers, investment advisors, or whoever else is needed to help them
• they will, in fact, carry out your intentions.
It might be a good idea to ask these people if they are willing to so serve before you name them in your estate planning documents. Of course, an executor or trustee can chose to resign. In that case the next successor executor or trustee takes over. A bank can be named as executor or trustee, although there are reasons to leave this to a last choice. Both executors and trustees can be compensated for the time spent administering your estate. You can talk to your own estate planning attorney as to whether you want to include in your living trust and/or will how much that compensation should be.
Estate Planning Considerations
Experiencing death in the family is a difficult reality. You’ve almost surely been through that, if not with parents, certainly with grandparents. What will happen when your death is the difficult reality facing your family? Part of holistic retirement planning is preparing for the end of your retirement- your death-and what impact that will have on your family.
It’s difficult to prepare your loved ones for all the contingencies following death, but advanced planning and preparations can make an enormous difference in their decision making at that time. Tough, highly emotional decisions can become the source of family conflict without your specific direction. However, if they know your intentions before you die, your survivors will do their best to carry them out.
Sadly and unnecessarily, most people leave their families without clear written documents to guide their decisions, and the last resort for ensuring conflict resolution may be the state’s probate plan. Don’t let strangers (state probate and death directives) make these personal decisions for you by not taking the time to indicate your desires by will and/or letter. An integral part of your retirement planning should include a properly drafted Last Will and Testament and other crucial planning documents, like a Durable Power of Attorney, Health Care Proxies, and Living Wills. These documents should be coordinated and drafted by a competent attorney who is familiar with estate planning issues.
• Last Will & Testament: This document is intended to transfer property you hold in your name to the person(s) or organization(s) you want to have it.
• Durable Power of Attorney: This document appoints a person that you designate to act for you and handle financial matters should you become unable or unavailable to do so.
• Health Care Proxies: This document appoints a person(s) to make decisions regarding your health care treatment in the event you are unable to provide “informed consent”.
• Living Will: This document is an advance directive which gives doctors and hospitals your instructions regarding the nature and extent of the care you want should you suffer permanent incapacity, such as an irreversible coma.
These crucial documents can be enhanced with the accompaniment of a personal letter to your appointed trustee and family members outlining your desires and stating your beliefs and wishes. This can be incredibly beneficial to those you love, perhaps your final gift to them.
Things to consider in your letter:
1. Share your love and words of encouragement. Express your appreciation for the uniqueness and benefits of individuals in your life.
2. Disclose where important documents are located, and the names and contact information of your financial advisors.
3. Make known your desires for funeral, religious services and other arrangements as well as if you feel strongly about burial, cremation, etc.
4. Share sentiments about family and friends and direction of personal articles or possessions. In order to be legal, this needs to be expressed with proper legal documents and accordingly witnessed and dated.
5. Express words for your children and future generations to live by, your personal creed. Share your life’s wisdom.
6. Give direction and ongoing support, gifts or monies to favorite charities, causes or people.
Estate Taxes
The IRS Estate Tax rules are changing annually. Most professionals believe that with future elections, this political juggernaut will continue to evolve. The constant changing of the unified credit, the possible repeal of the estate tax, the re-introduction of taxation at original cost basis (repeal of the step-up cost basis), all within a changing economic environment makes planning difficult. More than ever, the use of a team of qualified advisors including a financial planner, estate planning attorney, accountant and trust officer is crucial to keeping your plan flexible, well-communicated and efficient.
Some retirees adopt a Wait and See Estate Plan, involving trusts and ownership arrangements that provide for efficient estate planning and the paying of death taxes. Just as important, is the flexibility to adjust and update the plan by its owner(s). Thus, a new objective of good planning is to allow for changes without having to have major trust revisions and to reverse prior planning. This can be achieved with the Wait and See Estate Plan. Careful consideration of your life plan may include the use of Generational Skipping Trusts, Family Limited Partnerships and Educational Family Foundations. Tools are provided in today’s planning world to efficiently establish the means to achieve these goals. Your proactive financial planning should be a continuation of your life, becoming your ongoing gift of “you and your desires.” This is an incredibly beneficial gift to those you love, and it will simplify their planning during their grief.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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