Everyone needs an estate plan but many people don’t believe they have enough assets to warrant paying special attention to it. You may have written a will years ago and put it in a drawer or safety deposit box, where it might sit so long the people you give your money to die or leave your family. This could lead to a complicated probate. If your intended heirs are not available, the state will give your assets to immediate family members based on a formula. Although estate planning might seem morbid, it may actually offer you peace of mind to know your loved ones won’t have to fight over your belongings.
A complete estate plan has several elements. A will is the most basic document and but requires the probate process to occur which involves the courts. It takes time, money and it is public record, meaning anybody in the world can see your will.
Trusts are more complicated than wills. If you are planning to use a trust in your estate plan, it’s important to consult with an experienced attorney to ensure assets are transferred to the trust appropriately. A trust can be a valuable tool and many people can benefit from having one. When you have a trust, you’ll choose between a revocable or irrevocable trust and in some situations both. The ideal option for you will depend on your goals. If you only want to avoid probate, a revocable trust might be the right choice. However, if you want to use a trust to reduce your taxes or protect your hard earned money from unnecessary spending on care at a nursing home or the government, an irrevocable trust would be more effective.
The trustee you choose will manage the trust after you pass away. They will handle payments to your beneficiaries, pay taxes and make investments. It’s important to choose this person or corporation carefully because they may make decisions about your estate and determine whether your heirs should receive funds outside of the normal schedule. People sometimes choose a family member as well as an attorney to avoid conflicts.
Some assets can be passed to heirs without being transferred to a trust or going through probate. Bank accounts, life insurance policies and retirement savings may be transferred to the person named on the beneficiary designation form. It’s important to review these forms once a year along with your other estate planning tasks in order to be sure you still want the people listed to inherit your money. Forgetting to update your forms with the bank or life insurance company could result in an ex-spouse and his or her new family receiving money you intended to give to your adult children.
While it is possible to prepare an estate plan on your own, consulting with an attorney could help ensure you don’t miss important details that end up being costly. Instead of leaving your estate in the hands of probate court, schedule a consultation with Mindy to discuss your assets and how you would like to distribute your belongings to your loved ones after you’re gone and to protect your hard earned money from spending unnecessarily on care in a nursing home.
Call us at (301) 610-0055 and let’s schedule an appointment to sit down and discuss your estate planning needs.