ESTATE PLANNING
There are few investments that can pay off as big as your investment in
an estate plan. A small investment in legal fees to develop a plan now
can save a huge amount of future time, legal fees and estate taxes. This
page is intended to give you some background information on estate
planning and some selling points that we hope will induce you to hire
Advantage Law Group as your attorneys for this purpose.
Most estate plans consist of a Last Will and Testament and a Revocable
Trust for each spouse. A will provides instructions for disposing of your
assets after your death. A trust is a separate legal entity that can own
any assets you choose to transfer during your life. The use of a trust is
optional: if you choose not to transfer any assets to your trust, then your
will would dispose of your entire estate. The following sections highlight
the practical advantages of wills and trusts.
ADVANTAGES OF HAVING A WILL
- A will can say where your property goes at your death. If you die
without a will, the courts will declare that you died “intestate” and
your property will be distributed based on state law. This may
result in a distribution contrary to your wishes. A will allows you to
specify where your property goes at your death and avoids
potentially costly disputes between beneficiaries after your death.
- A will allows you to place conditions on the distribution. If you die
intestate, you could place a small fortune in the hands of an 18-
year old child with no strings attached. A will allows you to leave
a gift in trust for the benefit of your child, paying out the income
from the trust, but withholding the principal until your child
reaches a responsible age.
- A will allows you to minimize estate taxes. Federal and state
estate tax rates can be much higher than income tax rates. A will
can minimize estate tax exposure by ensuring maximum use of
each spouse’s individual exemption from estate taxes, through a
built-in device called a credit shelter trust.
- A will can name the person to act as your Executor. The Executor
is the person who accumulates all of your assets, pays off any
liabilities and distributes the remainder of your estate to your
beneficiaries. State law requires an executor to post a bond to
protect against the loss of estate funds resulting from
negligence or fraud by the executor. A will can eliminate the need
for executor to transact with a bonding company or insurance
company.
- A will can name a Guardian for your minor children. This
designation is not binding on the courts, but it’s a good way to
formally document your wishes.
- A will can spell out how your estate is managed. By specifically
authorizing the executor to engage in certain basic transactions,
a will can spare the executor from having to have those
transactions approved by the court.
- A will can minimize the time your estate spends in probate court.
Probate is a protracted, costly and public process. Your estate
will probably need to hire an attorney to manage the process.
Furthermore, while your estate goes through probate, anyone
can go to the courthouse and find out the value of the estate, the
individual assets and the name of the beneficiaries. A will can
ensure efficient probate administration. Only assets titled in your
name, without a beneficiary designation, are subject to probate.
Most assets can be titled in the name of a trust to avoid the
probate process, as discussed in the following section.
ADVANTAGES OF HAVING A TRUST
- A trust allows you to avoid probate entirely. By transferring assets
into a trust during your lifetime, there is no need to submit them
to the probate court to change the legal title upon your death.
This saves considerable time and expense. The advantage is
magnified if there is real property in another state, which would
require an ancillary probate proceeding. The main disadvantage
of trusts is that they require you to re-title and transfer assets to
the trust during your lifetime, to ensure they pass outside of
probate.
- A trust keeps your assets private. Since there is no need to report
assets to the probate court, they do not get entered on the public
record.
- A trust allows a Trustee to manage your assets if you become
incapacitated. Without a trust, a financial power of attorney would
have to be executed, or a court would have to appoint a guardian
to manage your assets on your behalf.
If, after considering the above information, you would like to put an
estate plan in place, you will likely need the assistance of an attorney.
We would like you to consider the following reasons for engaging
Advantage Law Group in that capacity:
- Advantage will quote a fixed fee for the services so that you know
exactly what your estate plan will cost.
- Advantage will provide for successor guardians, executors and
trustees, so that your will does not need to be re-drafted if the
individuals you initially appoint fail to become or cease to act in
their designated capacities. This minimizes future legal fees.
- Advantage will split up your estate between your spouse and
your children in order to make maximum use of your federal and
state estate tax exemptions. This minimizes estate taxes.
- Advantage will include a self-proving affidavit with your will, which
when properly executed, eliminates the need for having to prove
the will in court, minimizing future legal fees.
- Advantage will provide a copy of the documents on a computer
diskette, so that you can make incidental changes to the
documents without incurring additional legal fees.
If you would like Advantage to draft your estate plan documents please
complete and return the following questionnaire. We will contact you to
quote our fee for developing an appropriate estate plan. Your completed
documents should be delivered within a week of our receiving the
questionnaire.
Call one of our attorneys if you have any questions.
