Developing a Plan to Protect Individuals, Families, and Businesses.

 

Most Common Tools in an Estate Plan

Will:  a testamentary document that contains a distribution plan of your assets after you have passed away. The will names Executors to manage that distribution. If your assets are worth over $150,000.00, your will and estate will be subject to probate.

Living Trust:  serves as an extension of the creator, also known as the settlor, while the settlor is still alive and has mental capacity. To be effective, the living trust needs to be funded, meaning assets that hold title, must be titled in the living trust. The living trust also provides a distribution plan and management of your assets after you have passed away. However, unlike the will, a living trust does not have to undergo probate.

Pour-Over Will: similar to a stand-alone will, but exists in conjunction with a living trust. Whatever property that was not funded into the living trust is covered under the Pour Over Will, which will instruct the Executor to “pour” the assets into the living trust. Advance Health Care Directive: appoints an Agent to make medical decisions on your behalf, if you lack the requisite mental capacity.

The Advance Health Care Directive will also give your Agent authority to receive medical information and records. Durable Power of Attorney: appoints an Agent to manage your financial assets or properties in your absence or when you lack the requisite mental capacity.

The Durable Power of Attorney will tell financial institutions, such as banks that your Agent has the authority to act on your behalf.

Nomination of Guardianship of Minor Children: appoints a person to be the next legal guardian of your children should you pass away, while they are minors.  Otherwise, your children will become "wards of the state" and go through foster care homes before your family can fight to care for them.

Irrevocable Trust:  An irrevocable trust is a separate entity from the creator of the trust.  It will have its own tax ID number.  If done properly, it is a tool that minimizes one's gross estate.  However, there may be gift tax implications.  An irrevocable trust cannot be amended.  

 

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