ESTATE PLANNING & ADMINISTRATION Frequently Asked Questions
What is Estate Planning?
What is the Role of the Estate Planning Attorney?
Is Estate Planning Expensive?
Is a Will Enough?
What if I Do Nothing?
What is Probate?
How Much Does Probate Cost?
How Long Does Probate Take?
Can I Help my Family Avoid Probate?
What is Joint Ownership?
What is a Beneficiary Designation?
What is a Revocable Living Trust?
Should I Speak With my Children About my Proposed Distribution?
Should I Speak to my Parents About Their Estate Plan?
Who Gets the Objects of Sentimental Value?
What is Different About a Second Marriage or Blended Family?
Can I Make Sure my Children or Grandchildren Receive an Inheritance?
What is Estate Planning?
Good estate planning is not simply filling in the blanks on a legal form, not any more at least. The 21st century solution includes assessment of your family’s relationships, assets, needs, and goals, and a thorough discussion of the options available to you to build your estate plan and distribute your well-earned assets in the way you desire. [back to top]
What is the Role of the Estate Planning Attorney?
I help people who want to do the best for the loved ones they will eventually leave behind. People often say they want a Will or a Trust without consultation with an attorney or a good understanding what those two documents can and cannot do. I provide you with an assessment tool that will help us identify your needs and goals. Once identified, we choose the best options that will best protect the ones you love and address and avoid the potential future problems we have identified. [back to top]
Is Estate Planning Expensive?
Wills are relatively inexpensive and my Basic Will Package is $400 for an individual and $550 for a couple. Planning a Revocable Living Trust is more expensive because of the attorney time involved. My Basic Revocable Living Trust Package is $1,200 for an individual and $1,500 for a couple, and adding specialized trusts will increase the cost. I am always happy to discuss fixed pricing for any estate plan we create. If you read further, a Trust is usually only more expensive as an up front cost – probate of a Will is usually a more expensive alternative but paid by your family on the back end. We can talk about this more in person. [back to top]
Is a Will Enough?
A Will is better than no estate plan. Many years ago preparing a Will was usually enough, and Living Trusts uncommon for the normal person. That was during our parent’s time, and things have changed. Now if you use a Will to pass assets to your heirs you are sending them through 9 months – 2 years of court paperwork, costs, hearings, and attorney’s fees while the Will passes through Probate Court. [back to top]
What if I Do Nothing?
If you have no Will, or Trust, when you die it is called dying “intestate.” Even if you told your family how you wanted everything to be distributed, all property you owned in your name cannot be distributed without a court order. In order to get that order, your family must send your estate through probate , and the State will determine how to distribute your assets according to a predetermined formula. [back to top]
What is Probate?
Probate is the system designed to assure your money and property is legally transferred to your heirs & beneficiaries at your death. After your death a case is started in the local Probate Court and family members and heirs, and beneficiaries named in your Will if you had one, are notified of the filing. Anyone wishing to challenge the distributions you made by Will can now do so. The executor you named in your Will, or one appointed by the Court if you had no Will, makes a list of everything you owned and files the list with the Court making it a public record. Everything done in the case must be overseen and approved by a probate judge. An attorney is most always hired to prepare and submit the paperwork required by the Court. (The attorney is paid from your estate). [back to top]
How Much Does Probate Cost?
A 1990 study by the AARP concluded that fees to go through probate can deplete an uncomplicated estate by as much as 10%.[back to top]
How Long Does Probate Take?
Probate typically takes 9 months – 2 years to complete. A year is very normal.[back to top]
Can I Help my Family Avoid Probate?
There are three ways to leave your assets to your intended heirs without need of probate: (1) joint ownership; (2) beneficiary designation; or (3) creating a Revocable Living Trust. [back to top]
What is Joint Ownership?
Joint ownership to avoid probate is when you name the person you would like to have that asset as a co-owner of that asset while alive, and at your death these jointly-held assets will pass to the co-owner simply and quickly without probate. This can be done with bank accounts, houses, vehicles, etc. There are problems estate planning attorneys have seen happen that you should consider: What if the joint-owner on your home does not agree with you on how to use your home during your lifetime? What if your joint-owner on your bank account goes to the bank and drains your bank account? What if your joint-owner divorces their spouse and so the asset you hold with them is now listed as one of the assets in that divorce? In addition, this method of transfer does not protect your beneficiaries from death/estate taxes if any are assessed against your estate.[back to top]
What is a Beneficiary Designation?
Beneficiary designation to avoid probate is when you name the person you would like to have that asset as a beneficiary on that asset. When you die this asset automatically passes to the beneficiary without the need for probate. You have already named beneficiaries for each bank account, retirement plan, 401(k), or insurance policy you own. Beneficiary designations are safer than joint-ownership but they too can run into problems. For example, naming all your children as beneficiaries will cause them, and often their spouses by law, to reach a unanimous agreement on what to do with the asset after it passes to them upon your death. In addition, this method of transfer does not protect your beneficiaries from death/estate taxes if any are assessed against your estate. [back to top]
What is a Revocable Living Trust?
This type of Trust passes all your assets to your intended heirs & beneficiaries and allows them to avoid probate and allows you to avoid the problems of joint or beneficiary ownership. A Revocable Living Trust looks a lot like a Will -- they both state where your assets go when you die. Like a Will you are also in full control of your assets in the Trust during your life and you can conduct your financial affairs as you always have. (You can change or cancel the Trust, which is why it is called “revocable”, at any time.) A Revocable Living Trust enables you to control other outcomes and protections of your assets as well:
- Protect the inheritance of your children or grandchildren in case they divorce, die, or are sued;
- Protect your life savings if you or your spouse needs nursing home care;
- Protect the distribution of an inheritance to young or immature beneficiaries;
- Prevent a spouse from using up the inheritance intended for the children;
- Ensure your children use the inheritance for their education, a home, a business, or other specific event;
- Safeguard public benefits for a child with special needs;
- Shelter your estate from the federal estate/death tax.
- Provide for favorite charities
- Provide for a beloved pet [back to top]
Should I Speak With my Children About my Proposed Distribution?
Parents are usually surprised but the answer is actually “yes.” Parents worry their children will get lazy knowing about their inheritance, or worry they will pre-complain about what they are getting. However, what actually occurs is that discussing this before allows you to know your daughter didn’t want that jewelry but your antique gun, and a grandchild finds a small item you hadn’t thought of full of memories of you. It also gives you the chance to share the stories of where everything came from. Even if you don’t change your plan based on their wishes, your children will have time to work through their frustrations while you are alive, which means there is less chance they’ll fight over this in the future. [back to top]
Should I Speak to my Parents About Their Estate Plan?
The generation before us is called “the silent generation” for a reason. It’s hard but worth getting this conversation started. It’s not about you wanting to know how much you will get, but instead your attempt to make certain the transfer of their money, however they want it to go, goes as smoothly as possible after they die. Most parents would welcome a discussion about how they could avoid estate/death taxes through creation of an Estate Plan. Your effort may prod them into making an appointment with a lawyer to spell out their wishes. Knowing that your parents have at least a Will in place should give you some peace of mind. [back to top]
Who Gets the Objects of Sentimental Value?
Everyone has objects of sentimental value as family heirlooms. Some of the biggest family feuds erupt of the division of these objects, a very good reason to have pre-determined by estate planning where they will go when you die. You could ask your children what they want. Parents are often surprised by the answer, to find out your child was completely uninterested in what you thought they might be, and very interested in having something else. And if you have this discussion now, you get to tell the stories that go with the items -- it turns out to be a great way to leave your memories behind as well.
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What is Different About a Second Marriage or Blended Family?
A Will is a minimum estate plan for these situations. If you have children from more than one relationship you have children with different needs. Without a Will the government distributes half your estate to your current spouse and half to your children equally. This will be true even if your oldest child is 40 and financially settled, and your youngest child still in public school and needing money for college. Some husbands forget to remove their first wife as the beneficiary of their retirement plan, insurance policy, or from other accounts, so that an ex-wife from long ago ends up with the nest egg he meant for his second wife of 35 years and his children with her. An estate planning attorney makes certain that mistakes such as these are found and fixed before it’s too late. [back to top]
Can I Make Sure my Children or Grandchildren Receive an Inheritance?
You can bequest money directly to a child or grandchild in a Will which would be held in trust for them by their parents while they were a minor. You could also do this in a Trust which allows you much more control over the inheritance: you control their access to the money until a age you determine they should have it; you control their use the money for purposes you determine, like an education, a home, or to start a business; and you determine who you would like to hold the purse strings. [back to top]