Estate planning is the process of anticipating and arranging for the management and disposal of your estate during your life, as well as at and after death. A will, a power of attorney and healthcare power of attorney are part of the estate plan. Depending on the complexity of the situation, an estate planner might use other tools such as trusts, to accomplish your estate planning goals.
Yes, having an estate plan is important for everyone. While very wealthy individuals use estate planning to avoid tax, most clients that do estate planning do not have tax concerns. There are many important reasons for estate planning that include:
Wills and trusts serve different purposes. It is best to meet with an estate planning attorney for a consultation so they can discuss your needs and advise you on the best planning documents to meet your goals and objectives.
A pour-over will a planning tool used in conjunction with a trust. It is a will designed to "pour-over" or automatically transfer remaining assets into an already established trust upon your passing. Since having assets in a living trust avoids probate of the property with which they are funded, any property not funded in your trust will require probate when you die. A pour-over will acts as a safety net to capture property that wasn't funded in the trust upon your passing.
A Revocable Trust can be changed or revoked by the Grantor during the grantor's lifetime. A Revocable Trust gives the Grantor flexibility should needs, goals or situations change. However, a Revocable Trust offers less protection against creditors. An Irrevocable Trust cannot be changed or revoked. Once an asset is transferred to an Irrevocable Trust, the Grantor is usually unable to change the terms of the Trust. Assets in an Irrevocable Trust are usually not available to creditors, and assets placed in the trust within a certain time frame are not considered an available resource to Medicaid and thus are protected.
Some assets that are not appropriate to place in a revocable living trust include:
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