Estate Planning with a Will
A will is a basic and traditional estate planning tool.
Every person who owns assets should have, at a minimum, a will. A will dictates the distribution of an individual’s assets upon death. In general, when an Indiana resident dies without a properly drafted will, his or her property will be transferred according to Indiana intestacy laws. This means that the State of Indiana may dictate the distribution of a Indiana resident’s assets if such individual did not have a properly drafted and enforceable will in place at the time of death. However, if an Indiana resident has a properly drafted and enforceable will in place at the time of death, legal title to assets will pass in the manner intended by such individual.
In addition to having a will, Indiana residents should also consider putting in place additional estate planning documents for ease of administration of the applicable estate and in order to reduce the costs that may be involved in the probate process. Even with a will in place, the distribution of the assets of many Indiana residents is subject to the probate process. However, this process can sometimes be avoided with the use of a revocable living trust. Proper planning with a trust could enable an individual to avoid the probate process altogether, which will, in turn, save money as well as time upon the individual’s death.
In the event that a revocable living trust is used, it is generally coupled with a special will known as a “pour-over will”. The purpose of the pour-over will is to serve as a backup for the revocable living trust. It names the revocable living trust as the entity that should receive the assets of the deceased individual. This ensures that any assets that were not specifically placed into the revocable living trust will still end up in the revocable living trust by default.
Additional estate planning documents should also be put into place in the event that the intended beneficiary is a minor. Real estate and other assets should generally not pass directly to a minor, as they do not have the capacity to manage such assets. Instead, a trust should be used to provide the minor with the benefit of the assets, while leaving the administration and management in the hands of an adult.
Estate Planning with a Revocable Living Trust
Some people think that if they don’t have an estate worth over $1 million dollars, then they don’t need a trust. Tax planning for large estates can be an important motivating factor to do a living trust, however, there are other important reasons to use this type of planning. Clients enjoy the cost savings involved with the administration of a revocable living trust, as opposed to probate, and the control they have over the assets that they have transferred to their revocable living trust. The trust can provide for the surviving spouse, save estate taxes (depending on the type of trust) and help avoid incapacity and guardianship issues. Moreover, the trust provides a plan and a mechanism for the makers of the trust that will benefit them as they advance in years. If the makers of the trust no longer feel that they want to or can handle their own assets, the successor trustees, typically their children, will administer the assets of the trust for the benefit of their parents. Upon the passing of the parents, the remaining assets are transferred to the children, for instance, through trust administration, without going through the probate court.
The following is a list of some of the reasons to consider trust planning for your family:
- Avoids probate at death, including multiple probates if you own property in other states
- Could prevent court control of assets at incapacity
- If funded properly, brings all of your assets together under one plan
- Provides maximum privacy
- Quicker distribution of assets to beneficiaries
- Assets can remain in trust until you want beneficiaries to inherit
- A revocable trust can be changed or cancelled at any time
- Difficult to contest
- Prevents court control of minors’ inheritances
- Can protect dependents with special needs
- Prevents unintentional disinheriting and other problems of joint ownership
- Can be professionally managed with a corporate trustee
- Can reduce or eliminate estate taxes
- And, very importantly,…. Gives you peace of mind
Contact Randy Young today to get your peace of mind
See More About Our Wills Expertise