Letsch Law Firm can help you create a comprehensive estate plan to help you manage your assets now and to ensure your legacy for your loved ones.
A Last Will and Testament (Will) is a document that determines who will inherit your property (both personal and real) after you die. If you have young children, your Will may also express to the court whom you want to finish raising your children, as well as who will handle any money your children may have inherited (such as life insurance or personal injury proceeds following an accident.) This is often accomplished by including a trust for the children as part of your will.
If you plan to leave your estate to adults, and you own real estate, likely a revocable living trust is a better planning tool for you.
Trusts are a very flexible vehicles for transferring assets to future generations and charities while avoiding the court system and protecting the privacy of your beneficiaries. There are several different types of trust: testamentary trust (a trust embedded inside your Will that controls money after you die ie. for minor children, persons with disabilities, or saves assets for a second or third generation); inter-vivos trusts (trust set up while you are living).
Inter-vivos trust may be either revocable or irrevocable. Revocable living trusts are primarily used to avoid the probate process. Typically, the trust-maker is the trustee and retains the right to make changes to or cancel the trust at any time and dictate who the successor trustees will be. Assets can be transferred to the trust or out of the trust at anytime, until the trust-maker has died. At that time the trust becomes irrevocable, and no one can make changes to it. Just like a Will, the trust states who gets your assets after you have died. A revocable living trust takes the place of your Will. However, we sometimes do a pour over Will, just as a back-up, in case there is a probate asset that did not get transferred to the trust before you died.
Irrevocable trusts are used to protect assets for future generations and avoid certain taxes. This trust varies from a revocable trust, as you might imagine. Once the trust is signed and funded, there is very limited opportunity to change the terms of the trust, revoke the trust, or take assets out of the trust. Because they are so inflexible, we only recommend these trusts when we are very certain they are the correct planning tool to help you reach your goals.
A very special version of trust, pun intended, is a Special Needs trust. A special needs trust is used when the beneficiary has a disability and is receiving or may receive government benefits. Putting assets in a special needs trust for the use of the person with a disability makes the funds available to enhance the quality of life of the individual, but does not interfere with other benefits. A special needs trust may be either a testamentary trust or an inter-vivos trust. Also, it may be a revocable or irrevocable trust. The trust may be funded with money the disabled person has received (1st party trust) or with gifts by a third party, such as an inheritance (third party trust). These two types of special needs trust differ in many respects.
It is important to understand which type of trusts can be used to meet your estate planning goals.
There are two common forms of powers of attorney: General Durable Power of Attorney and Health Care Power of Attorney.For most people, we strongly recommend putting both powers of attorney in place. If you have these in place before there is a need, it can help avoid the necessity to go to the courts to get a guardianship and/or conservatorship once decision-making capacity has been compromised.
Additionally, specialized powers of attorney can be used for specific purposes and then terminated. For example, you can grant someone a limited power of attorney to sign a document for you, if you are unavailable to attend a signing event. All powers of attorney cease to be effective when the maker dies. A power of attorney cannot be used as a substitute for a Last Will and Testament.
A living will (also known as an advanced directive) allows you to put into effect your wishes for care near the end of your life. This is the document that specifies whether or not, or under what circumstances, you want to be kept on life support, should you be in an incurable condition where death is imminent. A living will can be combined with a Health Care Power of Attorney, but it may also be a stand-alone document.
To learn about guardianships and conservatorships, visit our Elder Law page.
Please contact our experienced estate planning attorneys to make an appointment. If cost is a factor, and your planning needs are straight forward, you may be able to use our budget friendly version which limits the amount of attorney involvement. See the video for more information or call (515) 986-2810.