Choosing Trusts, Wills And Lawyers - Estate Planning Decisions
The objective of this discussion is to review some of the myths and realities of estate planning. A number of articles have been written on the subject but let's see if we can't put a different spin on it by keeping it simple. By dispelling some of the common misconceptions, we will have a better understanding of how important it is to take positive action to keep our estate plans in order.
Some who would never consider fixing a garage door or stuccoing a wall would unthinkingly prepare a will or trust using many materials found in bookstores. Bookstores abound with quick-fix be-your-own-lawyer books and CDs, featuring forms and fill-the-blank forms and programs for wills, trusts, and powers of attorney for healthcare decisions. Some of these materials are even state specific, offering different provisions for residents of different states. Some of these do-it-yourself materials are fine, and may even be useful. If correctly used, many of these forms might work for a do-it-yourselfer. But suppose your case is different? Suppose you fail to properly use the form?
Estate planning attorneys can help you regardless of whether you want to draft a simple will for a small estate; to change an existing will so that it reflects a change in your financial status; to establish a living trust; or to set up an estate plan which includes a will, trust, and your health care and life support directives.
To insure that the life insurance proceeds will be excluded from the insured's estate, two of the primary requirements that must be met are that the insured must not have any incidents of ownership in the policy and the trust must be irrevocable. Some people believe that, in the face of tax law uncertainty, clients should avoid using ILITs. These same people fear that once a policy is placed in an ILIT, the policy is locked in the trust forever, even in the unlikely event that the estate tax is repealed. Nothing could be further from the truth. In reality, ILITs can be drafted with flexibility. Some ILITs today are being drafted to give the trustee the discretion to distribute the cash surrender value of the insurance policy to trust beneficiaries during the trust creator's lifetime. This "escape" language builds flexibility into ILITs.
With that information, estate planning attorneys can then explain to you the best alternatives for seeing that your estate is handled as you wish. They will not only discuss wills and trusts; they will present options which you can employ immediately to lessen the taxes and probate costs on your estate.
Concerning the issue of expense, in California the ordinary attorneys and personal representative fees are determined by statute, and are set out specifically in the Probate Code [California Probate Code 10800]. Extraordinary expenses may sometimes be charged, but the court must permit the added expense. Sometimes expenses may be saved if the personal representative waives his or her fee. If the executor or administrator is a family member, rather than an institution or professional, fees are often waived to save expense. In the final analysis, trusts are usually more expensive than wills to prepare, but wills administered through a court supervised probate are usually more expensive and time consuming than administering a trust. However, at least in California, there is another possible alternative: An expedited procedure for small estates (i.e., estates under $100,000, excluding exempted property) [California Probate Code 13100], which does not require opening and administering a probate estate. Therefore, in some cases opening a probate may not even be necessary.
Some who would never consider fixing a garage door or stuccoing a wall would unthinkingly prepare a will or trust using many materials found in bookstores. Bookstores abound with quick-fix be-your-own-lawyer books and CDs, featuring forms and fill-the-blank forms and programs for wills, trusts, and powers of attorney for healthcare decisions. Some of these materials are even state specific, offering different provisions for residents of different states. Some of these do-it-yourself materials are fine, and may even be useful. If correctly used, many of these forms might work for a do-it-yourselfer. But suppose your case is different? Suppose you fail to properly use the form?
Estate planning attorneys can help you regardless of whether you want to draft a simple will for a small estate; to change an existing will so that it reflects a change in your financial status; to establish a living trust; or to set up an estate plan which includes a will, trust, and your health care and life support directives.
To insure that the life insurance proceeds will be excluded from the insured's estate, two of the primary requirements that must be met are that the insured must not have any incidents of ownership in the policy and the trust must be irrevocable. Some people believe that, in the face of tax law uncertainty, clients should avoid using ILITs. These same people fear that once a policy is placed in an ILIT, the policy is locked in the trust forever, even in the unlikely event that the estate tax is repealed. Nothing could be further from the truth. In reality, ILITs can be drafted with flexibility. Some ILITs today are being drafted to give the trustee the discretion to distribute the cash surrender value of the insurance policy to trust beneficiaries during the trust creator's lifetime. This "escape" language builds flexibility into ILITs.
With that information, estate planning attorneys can then explain to you the best alternatives for seeing that your estate is handled as you wish. They will not only discuss wills and trusts; they will present options which you can employ immediately to lessen the taxes and probate costs on your estate.
Concerning the issue of expense, in California the ordinary attorneys and personal representative fees are determined by statute, and are set out specifically in the Probate Code [California Probate Code 10800]. Extraordinary expenses may sometimes be charged, but the court must permit the added expense. Sometimes expenses may be saved if the personal representative waives his or her fee. If the executor or administrator is a family member, rather than an institution or professional, fees are often waived to save expense. In the final analysis, trusts are usually more expensive than wills to prepare, but wills administered through a court supervised probate are usually more expensive and time consuming than administering a trust. However, at least in California, there is another possible alternative: An expedited procedure for small estates (i.e., estates under $100,000, excluding exempted property) [California Probate Code 13100], which does not require opening and administering a probate estate. Therefore, in some cases opening a probate may not even be necessary.
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Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: The Benefits Of Gold IRA In Smart Retirement Planning You have full permission to reprint this article provided this box is kept unchanged.