Trusts, Wills, Powers of Attorney for Property Management, Advance Health Care Directives, Estate Tax and Income Tax Strategies
Estate Planning involves developing written plans and instructions for the distribution of your property to your intended beneficiaries according to your desires, during life and after death. Estate Planning is for everyone, not just the super-wealthy, because, without your written instructions, the Court will impose a rigid default plan upon your death (via the probate laws). Estate Planning can also be effective in minimizing the impact of estate taxes and income taxes. The core of a contemporary estate plan is a living trust which serves two purposes: the trust agreement is a legal document with your instructions for distribution of your assets; and the trust is a legal entity to hold title to all of your assets. Although you will no longer be the named owner of the property, as trustee you will retain full control of the property. The primary benefit of a living trust is to avoid the lengthy and expensive court process of probate administration when you die. Instead, with a living trust the successor trustee you have chosen steps in to manage and distribute the assets according to your instructions. Your successor trustee can also manage trust assets in the event that someday you should lose the capacity to do so. The features of a living trust can be customized to suit your family situation and desired intentions. And, unlike a will, a living trust does not have to die with you. Assets can remain in the living trust, managed by your successor trustee, until certain conditions are met for your beneficiaries to inherit or to provide for a loved one with special needs. Popular features include an education fund (for children or grandchildren) and a “spendthrift” provision that certain beneficiaries must mature to a specified age in order to receive an inheritance.
For property that is overlooked and not included in the living trust, a “pour-over” will is designed as a safety net. A pour-over will simply directs the subject property to be added to the living trust (then held and distributed according to the terms of the trust). Property subject to the will may have to go through probate administration but it can then be distributed according to the design of the trust. Another safety net feature is a durable power of attorney for property management, exercisable upon your incapacity. The effect is to authorize another person as your agent to manage your property (not included in your living trust) in the event you should someday lack the capacity to manage your affairs. However, transferring all assets to your living trust is preferable because many financial institutions will not honor a power of attorney unless it is on the institution’s form.
A complete estate plan also includes an advance health care directive, which combines two elements. First, it has your instructions for health care and related matters with particular attention to life-prolonging treatments. Second, the advance directive contains a power of attorney authorizing another person (usually a close relative) to follow those instructions and make health care decisions on your behalf in the event you should lack the capacity to make those decisions. While the basic components of estate planning are discussed above, your plan will be customized to suit your family situation and legacy intentions. And, sophisticated tax strategies will be developed, as needed. The Law Offices of James C. Turney is prepared to develop an estate plan tailored to your needs.