This estate plan is based upon the revocable living trust. The trust can be thought of as a safe or a bucket in which all of your assets should either end up, or be transferred into. While you are living, you are the creator of the trust, the manager of the trust and the beneficiary of the trust. If you become incapacitated, then the successor trustee can use the assets in the trusts to support and take care of you.
When you pass, the successor trustee will use the directions in the trust to distribute your assets to your intended beneficaries without the cost and legal hoops of probate. If those individuals are not yet at an age that you deem old enough to handle the burden and privelege of inheriting the estate, then trustee will hold your estate in trust and provide assistance for their health, welfare, and education.
The trust is recommended for anyone who owns a home and/or has a child. A trust can help your beneficiaries avoid costly probate proceedings, quickly administer your assets, and provide for your care if you become incapacitated. Additionally, a trust can provide you with more control over when and how your beneficiaries receive a distribution of assets.
Finally, a trust may also help a married couple avoid the estate tax, which is currently set at $12,060,000.00 per individual. That means that a married couple can leave up to $24,120,000.00 to their children before any estate tax is assessed.
Transfer of Deed
The transfer of deed helps fund the trust. Through the transfer, we retitle the property from your name as an individual to you as trustee of your trust. This helps the property pass to your beneficiary without going through probate. This is important because when a property goes through probate, it is subject to probate fees. For example, the probate fee on a home valued at $1,000,000 upon your death is about $46,000.00. The amount that you owe on a mortgage is not calculated in those fees. However, by placing the property in trust, this fee is avoided.
We handle this transfer from the preparation of the deed to the recording of the deed. For many people, this one single asset would trigger expensive probate fees and potential conflicts among beneficiaries. Placing the property into trust will avoid those issues.
Final Disposition Wishes
This documents creates a directive and grants authority for your agent to either arrange a burial or cremation for you.
The Pour-Over Will
The will acts as a funnel for any asset that was not placed in trust. It directs your executor to distribute any and all of your assets into the trust. As long as these assets are less than $150,000, then this can be done with a simplified probate process.
The Power of Attorney
A power of attorney will help a trusted individual manage your finances in the event that you become incapacitated. Often times people are tempted to make their trusted individual a joint account holder. However, this can have many negative consequences. First, if the joint account holder has debt issues, then his or her creditors can seize the money in your joint account. Additionally, the joint account holder will receive all of the funds in the account at the time of death. This may not be desirable if you have multiple intended beneficiaries of the account.
The power of attorney eliminates these issues by giving the trusted individual power over your accounts, while leaving title solely in your name.
The Health Care Directive
A health care directive and health care power of attorney is something that many of us avoid thinking about. However, it is beneficial to the individuals that must make decisions on your behalf. There can be feelings of guilt or remorse if there is not a plan for your healthcare in the event that you become incapacitated. A healthcare directive removes that emotional burden from your healthcare agent by providing them with a clear plan on your desires for treatment during those difficult end of life moments.
A healthcare directive may also help keep your estate solvent by reducing unwanted medical costs.
Finally, the act of creating a healthcare directive forces us to converse with our loved ones about these issues and can help provide further clarity on the matter.