Many people that I meet with for the first time feel happy that they have a will and have taken care of their beneficiaries. If your only estate plan is to have a will, you are, in my opinion, doing it all wrong. By only having a will as your estate plan, you are saying – probate my assets, charge me at least 3% for the honor, and while you are at it, tell the whole world what I have. I have a better solution for you.
Make sure that you have listed not just primary, but also contingent beneficiaries on your retirement plan and life insurance.
Any accounts that you have that are not retirement accounts can have a designation such as Pay on death, Transfer on death, or I.T.F. These designations will allow you to avoid probate.

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Who hasn’t thought about what they would do or buy if they suddenly came into a lot of cash? There is the trip, or the car, or the debts to pay off, or the charity to support that we all think of. Most often, we come into these sudden large sums of cash through the death of a loved one. Sudden wealth, no matter how it comes to you, can be overwhelming. Generally, there is no need to do anything or make decision quickly. Generally, the best thing to do initially is nothing. Leave the accounts as they are for a moment and do your homework.

In the past week I have had this very conversation with the families of two of my clients who passes well into the 80’s. Their children are the surviving heirs and are at various stages of life. The two families felt comfort when I told them they did not have to do anything with their Parents’ account immediately. With both families there will be tax returns to file and Required Minimum Withdrawals to be taken. After that we can address the needs and dreams of each of the children as they feel fit to deal with this emotional and financial change in their lives.

Yes, there has been conversation about a car and a trip, but initially, both families have decided to do nothing. They are grateful for what they have received and the memory of their loved ones.

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Many people think they need a Living Trust so their assets will pass to their heirs easily and without tax. Here are a few facts to ponder when deciding if you need a Living Trust.

There will be no delay or expense of probate with a Living Trust.
True enough but if your titling of assets is done properly, everything may pass without going through probate. Any account with a beneficiary attached avoids probate, as do accounts that are joint or have the addition of “in trust for”, or “Payable on Death” after the joint designation.

You will save on all of the administration costs associated with probate.
A Living Trust does avoid the filing and court fees; however, the Trust may still be subject to an Executor’s fee and Lawyer’s fees. Many Executors are family members and will waive the Executor fee if there is not too much work to be done in settling the Estate. If an Attorney’s advice is needed, you will not be able to avoid those fees.

Your heirs can receive their distributions faster with a Living Trust.
Perhaps, assuming that your assets are not very complicated or your Trust does not establish a Postdeath Trust that dictates the distribution.

You will save taxes with a Living Trust.
If you have a Revocable Living Trust, you will not save anything in taxes. You still technically own and have the rights to the assets in the trust. These assets will still be subject to any federal and/or state death tax that may apply. Tax saving provision may be written into your trust to offset the tax.

A Living Trust can be a wonderful tool. Make sure it is written as you wish it to be and that you and your heirs understand the trust.

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I am working with a couple in which the Wife was recently diagnosed with a slowly progressing, yet debilitating disease. There is time to do some planning to move the assets around so they do not have to get spent into the poorhouse for her care. They have 5 adult children, two live close by, the others do not. The Parents want to start gifting to the two children who live close by and their Spouses so funds can be moved from the Wife’s ownership. The two children know that these funds are to be used for Mom’s care when the other accounts run dry. My concern for them is that the other children will feel left out. It is time for a family meeting.

I have invited all of them to come to the office so we can explain this new path they will be walking down. We do not want any of the children to feel that some are being gifted money while others are not just because they do not live here. Feelings can be easily hurt and at a time when the family needs to come together, we do not want resentment. Full disclosures of an illness and the planning taking place to make sure there are funds for this care for a long time is the goal.

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