Frequently Asked Questions

• What is a simple estate plan?

A simple estate plan consists of a Last Will and Testament, Financial Power of Attorney and Living Will/Advance Health Care Directive. Although it may be termed “simple” every person, regardless of financial status, age or marital status, should have each one of these documents to be certain there are no misunderstandings as to your wishes in the event of incapacitation or death.

• Who needs a will?

A Last Will and Testament is an item that is a necessity to mostly every individual as it allows a person to direct the disposition of their estate at death and inevitably will lessen any conflict or confusion as to one’s wishes.

• How often should I make changes to my will?

Any changes in one’s family situation such as marriage/divorce, birth of a child or grandchild, death of a family member, deviation of financial status or changes in the tax laws will require alterations to an estate plan. Even so, it is recommended you review your estate plan with your attorney every few years.

• What is the difference between state and federal rules affecting my estate?

Generally, a state mandates the terms of your estate under its states statutes. The major difference is payment of state inheritance tax and federal estate taxes.

• What are methods to transfer property at death? (will, trust, JT, and community property)

An estate (everything one owns at death) can be transferred either through probate or non-probate to the new owner depending on how the asset is titled. If an asset is held by joint tenancy, payable on death, contract or trust it can pass directly to the new owner. If an asset is named in the Last Will the asset will be transferred in accordance with the terms of the Last Will and if no Last Will then in accordance with the statutes of the state under which the decedent was a resident.

• What are non tax aspects of estate planning?  (children, trust fiduciaries, trust distribution, contingencies, POA)

A good estate plan can lessen and avoid intrafamily conflicts by specifically stating your wishes in the event of incapacitation or death. You can designate individuals to make financial and medical decisions on your behalf, name a guardian for your children rather than the courts, direct who will receive your assets upon death and make arrangements for pets.

• What is a living trust?

A living trust, also called an inter vivos trust, is a trust created while alive and you can be the trustee of your own living trust to keep control over the property while being held in the trust. There are several different types of living trusts that can help avoid and/or reduce probate and taxes and maintain long term property management.

• How to avoid probate?

There are several ways to avoid probate including gifting of your property while alive, revocable/living trusts, joint tenancy of property and payable on death registered accounts. However, avoidance of probate does not mean avoidance of federal or state inheritance taxes.

• What are the advantages and disadvantages of a will versus a living trust?

(a) a living trust takes place while you are alive while a last will only takes effect upon death;

(b) last wills can be contested;

(c) last wills can name guardians for minor children while living wills do not name guardians;

(d) a trust can hold assets after a person passes while an estate must dispose/transfer the assets;

(e) last wills are made public during the probate process while the trust remains private

• How can I effectively use life insurance in my estate plan?

Life insurance is an integral part of estate planning. Proper ownership of life insurance can be used to escape estate/inheritance taxes if the policy is not owned by the insured. Life insurance proceeds can be used to assist your family in the payment of inheritance/estate taxes.

• How does one transfer assets into the living trust?

Once a trust agreement has been executed it is necessary to establish and/or change bank accounts, brokerage accounts, annuities into the trust name specifically naming the type of trust, grantor and date of trust. If real estate is going to be transferred it is necessary that a deed be prepared and recorded in the appropriate government offices.

• What is the difference between a revocable and an irrevocable trust?

A revocable trust is one that allows it to be changed, modified or terminated during the donor’s lifetime and is included in the donor’s estate. An irrevocable Trust is a permanent trust that can only be modified under specific circumstances and the assets cannot be returned to the donor.

• What is a grantor trust?

A trust in which the grantor (person who transfers the property) retains an interest and control over the trust property. The property transferred to the trust is treated to some extent as still voluminous owned by the grantor for income tax purposes. The portion of the trust property that is treated this way is determined by the grantor’s interest in or control over the trust.

• Do I need title insurance?

Title insurance will protect you against loss arising from title problems. Most likely your real estate has gone through several ownership changes and there may be a weak point in the chain of title. Title insurance will protect the equity in your real estate in the event of claim or title problems.

• Do I need a lawyer to sell property?

Real estate has become so complex and turbulent over the last few years with mortgage foreclosures and real estate turnovers that it is now prudent to engage the services of a knowledgeable real estate attorney during the selling process not only to prepare the required deed for transfer but to review the voluminous documents to be certain you receive the appropriate monies from the sale of your property.