ESTATES AND TRUSTS: Wills and Trusts
We believe there is a real and useful distinction between estate planning and retirement or financial planning—and that is the premise on which we counsel and advise our clients. Rather than focus on selecting and preserving ownership of particular investments or properties, our estate planning process helps you protect and maximize the value of all your property when it is time for it to transfer to someone else. This includes all of the things that compose your personal legacy: money, real estate, investments and personal property. Estate planning can benefit almost everyone, but we believe informed, experienced advice in this area of the law is particularly useful for those with significant assets and those with family members with special needs.
Clients attest that our estate planning methods feel personal, flexible and accommodate a comfortable range of possibilities; that our advice and counsel are tailored to almost any circumstances. Our attorneys' estate planning tools include the creation and administration of will, trusts, powers of attorney, living wills, and succession plans for business entities such as partnerships, limited partnerships and limited liability companies.
We encourage you to talk with us.
To learn more about estate planning, click here.
How Do I Know if I Need an Estate Plan?
Most people can benefit from an Estate Plan in some form. Here are some general guidelines.
You should consider a WILL if one of the following is true:
- You have children, especially minor children
- You have an adult child under a disability
- You would like specific items to pass to specific individuals upon your passing
- You are in an unmarried relationship
- You wish to make an unequal distribution to your family upon your passing
- The aggregate value of all of your assets, including life insurance, is over $2 million
You should consider a TRUST if one of the following is true:
- You are in your second marriage
- You are over 50 years old
- You are ill
- You are in the midst of a divorce or wish to avoid claims against your estate by your spouse
- You have or anticipate having substantial creditors at the time of your death
- You have children from more than one marriage
- The aggregate value of all of your assets, including life insurance, is over $2 million
- You meet any of the criteria for having a Will and you want your beneficiaries to avoid the expense and time of probate upon your passing
Wills
We prepare wills that effectively and efficiently establish rules for the preservation or distribution of the property and assets in a decedent's estate. Wills can be short, long, simple or complex. A will nominates an executor, who has no power or authority until the maker of the will dies. At that point, the executor's job is to collect all assets, pay final expenses, and distribute the remaining assets according to the will's terms. Our attorneys often advise clients on the selection of appropriate executors and provide on-going counsel to assist them in carrying out their responsibilities under the terms of both wills and trusts. For a will to be legally recognized and enforced, the executor must hire an attorney to go to Probate Court. The probate process generally requires from six months to a year to complete. Probate is characterized as costly and time consuming, but fortunately, we have worked with many clients to create strategies, such as trusts, that help to avoid a long and costly probate.
Trusts
A trust appoints a trustee for trust property. The trustee has the power and duty to manage, invest and protect specific assets for the good of named beneficiaries until the time the trust specifies that the beneficiaries take control of the trust assets. Trusts survive the maker's death. What's more, the law allows a single individual to be both the trustee and the beneficiary of a trust created by that individual. Thus, by naming a successor trustee in the trust agreement, a trust can be used as a will substitute for the purpose of avoiding probate.
Trusts can be created in all shapes and sizes, and for a variety of purposes. They can be revocable or irrevocable. They can take effect today, at a specific age of the beneficiary or at the death of the maker. They can stand alone or be included in a will. Trusts can be created for nearly any legal purpose.
Trusts can, for example:
- Save estate taxes
- Protect money for minor children or persons with disabilities
- Provide for a spouse or adult children from a prior marriage
- Accept gifts for grandchildren
- Avoid guardianship
- Avoid probate
- And perform a myriad of other functions.
To learn more about trusts, click here.
More on Trusts
- Trusts are used to separate the "beneficial interest" of property from its "legal title." In other words, a trust creates a situation where one person owns property for the benefit of another.
- Lawyers use legal documents called "Trust Agreements" to establish trusts. Trust Agreements contain rules for the trust. One principal function of a Trust Agreement is to nominate a trustee.
- The trustee's power extends only over the assets specifically given to the trustee and made a part of the trust estate. Once assets are made part of a trust, the trustee is the only one who has the power and the duty to manage, invest and protect those assets.
- Assets are considered to be given to the trustee when they are re-titled in the trustee's name. At that point, the trustee becomes the property's owner, and thus holds "legal title."
- The process of giving assets to a trust is called "funding." Once an asset is used to fund a trust, it is no longer covered by a person's will.
- Even though the trustee is the owner of the trust property, the Trust Agreement will contain terms that limit the trustee's authority. For example, the trustee must hold, invest and ultimately use the trust assets not for the trustee, but for the benefit of the individuals named in the Trust Agreement.
- The people who are named in the Trust Agreement to benefit from the trust are called "beneficiaries." Thus, as to the trust assets, the trustee is the owner of "legal title" and the beneficiaries are the ones with a "beneficial interest."
- Since the beneficiaries do not have legal title to the property, the beneficiaries cannot sell, encumber or otherwise touch any of the trust assets unless the trustee consents. The trustee cannot consent unless the Trust Agreement allows it. As a result, trusts are very useful for holding money for minor children.
- Trusts survive the maker's death. What's more, the law allows a single individual to be both the trustee and the beneficiary of a trust created by that individual. Thus, by naming a successor trustee in the Trust Agreement, trusts can be used as will substitutes for the purpose of avoiding probate.
- Trusts can come in all shapes and sizes. They can be revocable or irrevocable. They can take effect today, or at death. They can stand-alone or be included in a will. Trusts can be created for nearly any legal purpose.
- Trusts are used to save estate taxes, protect money for minor children or persons with disabilities, provide for a spouse or adult children from a prior marriage, accept gifts for grandchildren, avoid guardianship, avoid probate, reduce your taxable estate at the time of your death, create or benefit a charity and perform a myriad of other functions.
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