How To Get Started On An Estate Plan
This guide will help you think about what type of estate plan you need. Remember, whether or not you have a will/trust, you may still have assets that need to be probated. A will/trust does not avoid probate. Contact an estate planning attorney to review your assets to limit the need for probate.
Who Needs A Will?There are many reason people need a Will but the most common are:
1. You want to be sure that your instructions on dividing your assets are clear to your heirs.
2. You have property either real estate or personal property that does not have a joint owner or beneficiary for it. This makes it a probate assets and without instruction, it will be split between all your immediate heirs.
3. You intend to disinherit one of your heirs. Without a will this person could inadvertently inherit part of your estate.
4. You want to be sure that certain people handle your estate and that others do not. Example: "My oldest son John is appointed my Personal Representative. My youngest daughter is appointed if John is unwilling or unable to act." This would ensure that any of your other heirs cannot be appointed.
5. Anyone with special instructions they would like the heirs to take into account after they have died. Example: "Bury me in this area". "I would like to be cremated". "Donate my body to science."
When Do I Need A Trust?There are many reasons why people might opt for a living trust instead of a simple will only. Some of them are:
1. You need to shelter assets that are taxable after death. This is called a "Tax Shelter Trust".
2. You have an heir with special needs. This is called a "Special Needs Trust"
3. You have an heir with an issue like gambling, drinking, drugs or consistent mismanagement of money. You can set up a trust to pay out a smaller amount at certain times of the year so that assets won't be squandered. This is called a "Spend Thrift Trust".
4. You have an animal that requires care after your death. If you are concerned about the well-being of a domestic animal, Dog, Cat, Bird etc. You can arrange to have a certain amount of money set aside in trust for the care of the animal. This is called a "Pet Trust".
5. Many people also want to be sure a minor child is cared for after their death. This is called a "Testamentary Trust For Children" which can be incorporated into a will. There is also a "Special Needs Trust" for disabled persons and an Irrevocable Living Trust that can be used to help someone qualify for Medicaid. These all require special provisions.
A trust is also helpful if you own property in more than one state. It will avoid the need to probate the real estate in the state where it is located.