Fundamental Estate Planning

There are many legal strategies involved in estate planning, including wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents.

What Should Be The Ultimate Goal Of Proper Estate Planning? What Should Your Plan Accomplish?

An estate plan should accomplish several things. In the short-term, it should address issues that relate to the possibility of disability for you, your spouse, and/or your children. For the long-term, an estate plan should address how to maximize the value of your life’s work, and best protect those people about whom you most care. In regard to the short term, many people have a serious misconception as to what happens if they become substantially disabled. They think that if they become disabled, their spouse or a loved one will take control of their assets and administer them for the benefit of the disabled person. This is particularly true for married couples when they have joint tenancy ownership of bank and brokerage accounts because these assets are immediately available to either joint tenant. However, the problem is that beyond those asset categories, the opposite occurs. If a joint tenant becomes disabled, the asset becomes locked as to all joint tenants. That means that real estate partnership interests, retirement benefits, and any asset you can think of other than bank and brokerage accounts lock up. Thus, upon the disability of any one joint tenant, most assets are not available to meet the family’s economic needs…Read More

What Are Trusts? Why Should We Use Them?

Trusts avoid the need for a conservatorship in the event someone suffers substantial disability and prevents the need for a probate estate administration upon death. Think of a trust as a wagon. The purpose of the wagon is to carry your assets past the probate court upon disability or death so that you don’t have to enter the probate court which has a very expensive cost of admission. The concept of how a trust operates is like a triangle. The points of a triangle are the positions inherent in every trust. The grantors or settlors are the people who create the trust. The trustees are the people who manage the assets that are placed in the trust. And, the beneficiaries are the people for whom the trust has been created, who receive the benefits of the trust. When a trust is created, you hold all three positions. You create the trust. You have exclusive control of your assets once they’re in the trust. As a result, you and your family members are the exclusive beneficiaries of that trust once it’s created…Read More