ElderLaw

Mediation and Living Trusts

By Diana Mercer, Attorney-Mediator, Peace Talks Mediation Services, Inc., http://www.peace-talks.com/estate.php

There are lots of decisions which go into deciding if you need a living trust. http://www.peace-talks.com/trust.php. It can depend on your assets, because everyone wants to minimize their estate taxes and make their estate as easy as possible to administer. http://www.peace-talks.com/needtrust.php But there are other reasons for living trusts, too, like providing for minor children or grandchildren, providing for a special needs adult child, creating a “spendthrift trust” for a beneficiary who you believe is a little too freewheeling with financial decisions, and to avoid probate court, to name just a few of the benefits of a living trust. http://www.peace-talks.com/cost.php

Many couples and families now choose to work these issues out in Mediation Services. http://www.peace-talks.com/estate.php. When you mediate your estate plan planning, you choose the agenda and the participants. You have plenty of time to learn about the options, consider your choices, and make a decision.Maybe you include your intended beneficiaries…and maybe you don’t. Or maybe you include them on an as-needed basis. Your mediators can help point out issues, facilitate discussions, make sure you have the information you need to make a good decision, and help you to decide what you’d like for your legacy.

You worked hard to earn, preserve, and build what you have. Why not take an active role in deciding what happens when you’re gone? Estate planning gives you a unique opportunity to create your own legacy with the choices you make. Why not maximize the potential of your estate as well as facilitate family harmony?
When these issues are presented in terms of preserving family legacy versus dividing up assets which can never replace the deceased family member, we find the conversations engender more security than fear.

The purpose of mediating your estate plan is to give you the opportunity to explore all of the options for your estate plan BEFORE you put it into an official document. That way you consider all the choices and make a thoughtful decision rather than blindly following a lawyer’s suggest of “this is what everyone else does” or, worse yet, leaving it to the government to decide after you’re gone. As unpleasant as that thought is, that’s exactly what will happen if you don’t make the decision yourself.

Want to talk about estate planning and our mediators with others planning their estates, too? Visit the Estate Planning and Mediation blog: http://www.peace-talks.com/estateblog/

Estate Planning- living Trust Features

The term ‘living trust’ is popular and widely used in the estate planning circles. Many people however fail to appreciate properly the meaning of the term. Learning about the features of living trust could help preparing effective estate planning.

Living Trust is one of the terminologies that are often used in the field of real estate and especially in the arena of estate planning . Clients apart many legally knowledgeable people also fail to realize the true features of such living trust very often. Understanding features of the living trust could help accomplish the task of preparing an effective and comprehensive plan for estate management.

Getting adequate protection of the property from predator like creditors is one of the basic objectives of effective estate planning. Living trust can protect the properties from the unscrupulous creditors but not completely. Properties that are subject of living trust can be quickly as well as quietly transferred to the beneficiaries. Creditors will not know what was won or transferred by the property holder. Sense of protection evaporates when the creditor goes on preferring law suits since in such cases neither the property under hold nor that transferee can be concealed. A good and experienced estate planning attorney will also advice you against such practices.

Only saving grace in the entire circumstances is that most of the times the creditors do not have the time or will to pursue their debtors to find out such properties that are subject matter of the living trust. Entering into law suits for recovery of debt is also not preferred by many such creditors. Good trust planning attorney can also find out ways and means where inconveniences are not faced either by the client or by the creditor. Arranging management of estate in such manner is one of the major challenges for them.

Divergences of legal systems that exist from state to state have to be taken into consideration as well. For instance one who is trying for estate planning in Orange County has to look for the specific laws and regulations prevalent in the county so that they are not in for any unpleasant surprises at the end of it

A description of the benefits of trust planning by Jim Alder, owner of Alder & Robb, PC, a Salt Lake City, Utah estate planning law firm. www.alder-robb.com
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What Is A Revocable Living Trust?

It is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust (also known as a revocable inter vivos trust or grantor trust), your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die—all without the need for court involvement.

Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, you can revoke or change any terms of the trust at any time as long as you are still competent. (The terms of the trust become irrevocable when you die.) In your trust agreement, you will also name a successor trustee (a person or institution) who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.

A living trust does not, however, remove all need for a will. Generally, you would still need a will—known as a pour over will—to cover any assets that have not been transferred to the trust.

You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will and other estate planning documents. Also, keep in mind that your choice of trustees is extremely important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.

How to Use a Living Trust

A living trust may be the right choice for some consumers but it is not the right choice for all consumers. This article looks at some of the more common issues associated with living trusts.

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Trust-based Estates: The Revocable Living Trust

Trust-based estates are different from will-based estates in that they include a revocable living trust along with a last will and testament. Since the trust includes most of the details that a last will would also include, the will associated with a trust-based estate is far less detailed and includes such pertinent details as the name of the executor or personal representative of the estate.

What is The Revocable Living Trust?

The revocable living trust encompasses three phases of an individual’s life. These phases include the time when he is alive and well, the time he becomes mentally incapacitated if he does, and the time after he dies. In some cases, the middle stage of the trustmaker’s life never occurs and is simply disregarded.

Typically, the individual who creates a revocable living trust is referred to as the trustmaker. If he is so inclined, he can hire someone to oversee the trust. Typically, this individual will be his attorney or institution. If he decides to oversee the revocable living trust himself while he is healthy and mentally alert, he can choose to do so. When that occurs, the trustmaker is also referred to as the trustee.

How to Create a Revocable Living Trust: First Stage

The first stage of a revocable living trust encompasses that portion of the trustmaker’s life when he is alive. Specific provisions are in place within the trust during this stage of the trustmaker’s life. These provisions are designed to allow him to invest, manage, and spend his trust assets in the manner that he sees fit.

Generally, it is business as usual with a tiny twist. The trustee, typically also the trustmaker, signs off on each transaction regarding trust assets. Additionally, if the trustmaker is the trustee, he can use his social security number as his taxpayer identification number. His income taxes can then be filed using an IRS 1040 form instead of an IRS 1041 form.

How to Create a Revocable Living Trust: Second Stage

The provisions of the trust agreement that relate to mental incapacity are in place as the second stage of the document. They depict the procedures that must be followed should the trustmaker become mentally incompetent. In some cases, this stage comes about when the trustmaker has suffered a mental breakdown or the ravaging effects of Alzheimer’s disease. In other cases, it involves an incapacity due to medical treatments and medications.

If and when this stage comes to pass, the trustmaker can no longer act as trustee and someone else will have to take over for him. This individual is named as the successor trustee within the trust agreement itself. He is listed as a “disability trustee” who will take over for the trustee should he suffer a major downgrade of his mental capacity. The “disability trustee” will be able to take over the management of the trustmaker’s finances including his assets and bills.

How to Create a Revocable Living Trust: Third Stage

The third stage of the revocable living trust encompasses the time when the trustmaker has died. The successor trustee at this time is referred to as the “administrative trustee.” This individual is named within the agreement. He takes over all of the trustmaker’s finances including his debts, bills, and taxes. The disbursement of the remaining funds is clearly delineated within the agreement and will occur in a timely fashion as long as all of the pertinent details have been taken care of in full. The distribution of the funds will be taken care of by the “administrative trustee.”

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Estate Planning ? Living Trust and Will

Many people wishing to prepare a comprehensive estate planning have the doubts about living trust and will. Even when such persons create living trust, the will would be indispensable part of good estate planning.

Will living trust dispense with the requirements of a will? That is one of the questions that plague the mind of most of the people who are trying to prepare a comprehensive estate planning . Will as such is indispensable as it provides essential back up for the property that is not transferred to self as trustee by the owner. Acquiring property shortly before death could result in the owner forgetting to transfer the ownership to the trust. Since such property won’t pass the terms of the trust document, they cannot be accepted as part of the trust.

Pertinence of will is evident from the fact that one can easily include some clauses in it that would bring up any property within its ambit that won’t leave the properties to any particular person or entity. Problems of not having will is that the property that is not transferred to the living trust or any other probate can only inherit on the closest of the relatives as determined under the law of the land applicable in Orange County or Southern California as the case may be.

Other ways of transferring assets to the inheritors that are free of probate includes multiple ways. Transferring properties within short period of weeks or at most months of the death of the owner could be possible. Making gifts just before the death or adding the pay-on-death clause with the bank accounts, having the residence in joint tenancy with survivorship rights are some of the adopted processes. Also the methods like the life insurance policy, in-trust-for bank account that is known as Totten Account and the Keogh accounts, individual retirement as well as pension inheritance accounts are used for such inheritance protection by experienced trust planning attorney .

Living Trust however is the only one that could be used in all types of properties and it offers the flexibility of broad planning as well. Alternate beneficiaries can be identified if the primary beneficiaries nominated for inheritance suffers premature death. Experienced estate planning attorney can give you the best advice on such matters.

Palm Desert, Palm Springs, Newport Beach and Indian Wells Trust Attorney Advises When Living Trusts are Useful in Estate Planning

When setting up a living trust in California, it doesn’t matter where you live, La Jolla, Del Mar, Rancho Santa Fe, Encinitas, Carlsbad or San Marcos, for instance in San Diego, CA, or Newport Beach, Newport Coast, Crystal Cove, Laguna Beach, Anaheim Hills, Yorba Linda or Corona del Mar as an example in Orange County, California, or even in Palm Springs, Palm Desert, Rancho Mirage, Indian Wells or La Quinta in the Coachella Valley, they have usually been set up by an estate planning attorney to reduce probate expenses and estate taxes for the clients. Today, their usefulness in that regard depends on the size of the estate.

When a trust is set up, one person’s legal property is held in trust by the trustee for the beneficiary. With most living trusts, you are the trustee of your own trust property and keep full control over all the property in the trust. That is why people should not be scared of setting up a trust for themselves. The scary thing is when people try to set them up without the assistance of an attorney. That is when mistakes can be made.

Finally, if you have a large estate and need to save on estate tax, more complicated living trusts can be created to reduce your tax at the time of death.

If you have a trust, will, or estate planning issue of any kind, call the Law Offices of R. Sebastian Gibson, or visit our website at http://www.sebastiangibsonlaw.com  and learn how we can assist you.

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The Living Trust Dilemma

Passing on wealth has been tricky business since the time of ancient Egypt and Greece. Unaware of the inner workings of wealth, most people have little knowledge of this vast and fascinating subject. Before determining the fate of heirs, here are some checkpoints to ensure property, cash (and even gold!) are handled properly and get into the hands of the right people.

Easy to get and create, the Living Trust offers a way to pass on wealth without the complications of going through Probate Court. With a couple of witnesses, the simplest forms, available at stationery stores or from the Internet, solve the two most common problems:

1.    To whom the assets pass.
2.    Identification of these assets.

Because most people have not been educated in the art of passing on wealth, though, they believe their Living Trust just goes into effect upon their passing. This is not, necessarily, true. The Trustors, those setting up the Trust, need to take the time to identify and transfer into the Trust what they plan to pass to their heirs. This avoids confusion, and even agony. Loved one can be well provided for, only IF the assets have been properly handled properly.

Neglect
If a person has a Living Trust, signed it, then put it on the shelf without doing anything else, he or she may have wasted time and money. Even a Living Trust needs attention and proper administration.

If a person has a Living Trust has the following been handled?

1.    If a Beneficiary is dissatisfied and wants to sue the Trustee for more of the assets, does the Living Trust have in it a “No Contest Clause?”  This means that should any Beneficiary sue, causing a dissipation of the Trust resources, the Beneficiary automatically loses his or her inheritance.
2.    What happens if the original Trustors, those who set up the Trust, and then became the initial Trustees, are unable to perform their duties? How should the Trust funds be handled, and exactly when does the named Successor Trustee take over?
3.    Is there a provision for amendments? That is, can the Trustor(s) change the terms of the Trust during the lifetime?
a.    If there are any amendments to the original Living Trust, what is the procedure?
b.    Should the Beneficiaries be told about the changes?
c.    Should the Successor Trustee be told about the changes?
4.    Have funds been earmarked as Trust funds? 
a.    Has a separate checking account been put in the Trust’s name? If not, the Trust was never funded and there is no Trust.
b.    Has identified property, such as the residential home, been transferred at the county to be in the Trust? If not, then the property is not part of the Living Trust.
5.    Is there enough documentation in the Living Trust so the Successor Trustee can open a checking account in the name of the Trust?

Accounting
As the initial Trustee(s) of the Living Trust all the assets remain under the control of the Trustor(s), who can spend the funds without discrimination; these initial Trustees, though, still need to keep records for the Living Trust. Whoever is Successor Trustee becomes responsible to produce those records after the Trustor(s) pass, as well as keep accounting records for how Trust funds are handled. The Beneficiaries have a right to know what happened to the funds the Trustors said belong to them. (Evangelho v. Presoto (1998) 67 Cal.App. 4th 615 , 79 Cal.Rptr.2d 146.)

The need to account to the Beneficiaries for Trust funds, keeps the Successor Trustee honest. Any Trustee who will not share the accounting and have full communication with the Beneficiaries is suspect and only adds to the family stress.

Giving Away the Goods
Further, as the initial Trustee of the Living Trust, assets cannot arbitrarily be given away if they have been earmarked as part of the Trust. This means the Trustors cannot give the residential property to the nurse who is taking care of them while everyone else awaits the funeral. The Beneficiaries can sue, and get the property back. Not only that, but caregivers cannot, by law, accept any gifts.

Assets
Identification
Disputes that can happen over assets are sometimes more awful than the worst nightmare. Cataloging what belongs in Trust is necessary to ensure it stays in the Trust and is properly handled. If an item is not in the Trust, that is, not listed and described as belonging to the Trust, then it is subject to a free-for-all, since the Beneficiaries can then argue over it. The Successor Trustee named in the Trust documents is not responsible for the item. For example, if a washer and dryer are not named as part of the original Trust assets, known as “corpus,” and two Beneficiaries want them, they need to decide without involving the Trustee.

Assets Held in Trust
If expensive jewelry is listed and each item photographed or described as belonging to the Trust, then the Trustee has the choice of cashing it in for current value and paying the cash to the Beneficiaries or giving the jewelry to the Beneficiary who is to have it, as stated in the Trust documents.

The same applies to the stock account, or any other investment. Once in the Trust, the Successor Trustee decides how it is to be handled. When it is not in the Trust, lengthy procedures to get it into the Trust can occur.

Residential Property
The biggest asset is usually residential property. If the Trustors, acting as Trustees, have not transferred the asset at the County Recorder’s Office into the name of the Living Trust, then it does not belong to the Trust and the Successor Trustee needs to transfer it before it can be sold. This transfer process could be lengthy and expensive or relatively simple.

Distribution
A Living Trust is designed to be parceled out to the Beneficiaries after the death of the Trustors. If they are in a nursing home and unable to function, the expenses for their care come out of the Living Trust assets and the Contingent Beneficiaries, those who receive assets upon the death of the Trustor(s), may not get anything.

When all goes well, assets have been properly transferred and identified in the Living Trust, and the Trustors die fairly close together without exhausting Trust assets. The Successor Trustee then delivers the assets by either cashing them out, such as selling the property, and disbursing the proceeds, or gives the assets to those named in the Trust documents.

Unfortunately, most people are not educated about the ways of a Trust, and more often than not, nothing has been identified and transferred, leaving a delay in distribution, and a burden on the Successor Trustee, who is usually a close family member.

Communication
Unfinished business
When parents die, family matters are often emotionally charged with unresolved needs, and competition for assets or dominance may occur. The state of affairs of a Living Trust can cause grief. This ranges from, “Mom said I should get the . . .” to “You can’t do that, I will not get my . . .” The lack of trust in the Trust can become the major issue.

Consultants
Before the assets become the responsibility of the Successor Trustee, who is usually completely in the dark about the financial status of the Trust, the Trustors should consult with professionals about how to handle the administrative needs of the Trust, and meet with their Successor to go over important details.

When a family is dysfunctional, it is best to get the communication matters handled first. For the badgered, uninitiated and overwhelmed Trustee, consult with professionals before trying to muddle through Trust documents and answer the family members’ questions. Such time and money will be well spent, especially if complex financial matters need sorting out. It is important the Trustee gets the accounting, legal and tax matters straight before communicating with family members about the Trust details.

Wealth Building
The Living Trust and all revocable Trusts are not built to last. Long-range wealth-building methods and procedures are not applied when planning solely to pass on assets to untrained heirs. Unless one’s children are oriented professionally about financial matters, whatever wealth the Trustors accumulated during their lifetime is likely to be lost by the next generation. This is well planned by those who want to ensure the family does not gather any power as shown by the following:

“People are kidding themselves. They don’t have the buying power they used to have. A lot of the people living today don’t know what the buying power of success was before we decided to use excessive income taxes to punish success and estate and gift taxes to force every generation to start from scratch.”  (Emphasis added.) . . .

T. Coleman Andrews, IRS Commissioner, 1953 to 1955

(“Why The Income Tax is Bad, Interview with T. Coleman Andrews, Former Commissioner of Internal Revenue,” U.S. News and World Report, May 25, 1956)

Irrevocable Trusts
Where wealth can be amassed, if properly managed, is when it is given to professional third parties to act as Trustees for the untrained Beneficiaries, who lack financial experience and have no long-range goals.

Only those who are sufficiently educated, though, in Trust protocols should have a Trust of this nature. One can get the information through a serious search on the Internet using keywords about Inheritance, Irrevocable Trusts, and Common-Law Trusts. The last requires the more sophisticated knowledge, and is often the subject of scam Trusts—those set up improperly by the uninitiated.

By knowing the objective of all Trusts is to pass wealth to Beneficiaries, it is easy to judge the correctly set up Trusts from those which are not. If anyone states a person can be the Trustee of his or own Irrevocable Trust, that person is either lying or dangerously ignorant. Further, all Common-Law Trusts are Irrevocable and require a nonrelated Trustee.

Summary
Passing on wealth is an art form. Doing it casually causes dissipation of wealth. Needing to keep personal control does not allow a build-up of wealth in the family, and each generation must then start over to generate wealth.

The Trustor(s) can assign the assets in the Living Trust to an Irrevocable Trust at the time of his or her death, naming the Trustees in the Living Trust documents. It depends on what is needed and how plans for heirs are developed.

Tips On How To Put Together A Living Trust

During our long lives we discover how crucial it is to save money. It assists to have a savings or cushion that you can fall back on when rough times hit us. A living trust is used to keep all of the real estate or assets that you have safe and sound and to pass them along to the individuals you leave behind when you die.

When you put a living trust together you are supplying a way that you have the ability to handle all the things that you own and taking away any troubles that will arise when those assets are transferred if you die. Learn the required steps to follow to create a living trust properly.

Inventory

The first thing you will have to do before you contact your attorney is to create a list of the assets that you own. Write down any valued jewelry, real estate, or other notable things that you think should be on the list. You can buy specific programs that will assist to make this simpler or put it all in an Excel text file.

Forms

Go online or to a bookstore to accumulate the forms for Durable Power of Attorney for Healthcare, Durable Power of Attorney for Assets, Nomination of Conservator, and a Competency Clause. Fill each of these out and make sure that you have them included in the living trust. The majority of the areas will give you probono legal advice and aid if you are not sure just how you are able to to fill them out.

Transfer Assets

Sit down with your lawyer and transfer your assets into the trust. It is better to include all of the things on your inventory list so that you have the ability to avoid any taxes and other kinds of fees. When you have completed this you can register the living trust and contact the state so that the deed might be certified or notarized.

Dangers of Do-It-Yourself Wills and Living Trusts

Estate planning is an essential part of life and death.  In planning for our future and our family’s future, we must take stock of who we are, what our goals are, and how we want our estate distributed.  With the easy availability of do-it-yourself Wills and Living Trusts, it can be all too tempting to take care of your estate planning needs yourself, rather than pay what may seem like high fees to an estate planning attorney.

You can easily go on the internet or the local office supply store, gather the necessary forms and information, spend a little of your time, and, presto, you have a Will or Living Trust. However, it is very easy to overlook important legal and technical planning points that can cause the estate or your beneficiaries to pay unnecessary taxes, high fees to attorneys or probate court, or can cause assets to be distributed to the wrong people at the wrong time.

What may seem like a great deal could cost your estate and your beneficiaries tens of thousands of dollars (or more) in the long-run. All too often it’s not just about the money… there is frequently added anguish that family members have to endure in dealing with details you thought you looked after.

In a case settled in 2005, a successful Washington businessman wrote his own Will assuming his assets would be free of estate tax.  However, due to the language he used, the IRS interpreted the law differently and claimed all the assets he passed to his wife were subject to 0,000 in estate tax plus 0,000 in back interest.  His family went to court and eventually won, but only after nearly ten years of costly litigation and years of turmoil.

One of the biggest problems with do-it-yourself software packages and forms is the lack of personal advice. Although this software may be able to walk you step-by-step through a form, it can never provide the advice that comes from an experienced estate planning attorney.

Experienced estate planning attorneys do not create a boilerplate Will or Trust. Instead, they can help you create a customized, individualized estate plan based on an in-depth discussion about your current financial situation, your future plans, and your intentions once you pass away.  In fact, many of the software packages and other do-it-yourself resources have a strong disclaimer that says they are not a substitute for legal advice and to consult an attorney for help in understanding how the law may apply to your particular situation.

A comprehensive and effective Will or Trust is based on asking all the right questions and taking your individual needs into account, something no software or form can do.  How can you even know if you need a Will or Trust? There are substantial differences in those two tools and oftentimes a Will and a Trust need accompanying documents to make the plan work exactly as you’d like for it to.

When is a Do-It-Yourself Estate Plan Insufficient?

We could easily argue, “Always!”  But let’s be more specific. Do-it-yourself kits cannot adequately cover your needs if, for example:

You own property You own a share in a small business You wish to disinherit your spouse or child You wish to leave money to your grandchildren but not your children You are married and you and/or your spouse have children from a previous marriage You wish to arrange long-term care for a disabled beneficiary You have minor children You have investments, including an IRA or 401(k) You’re worried about young or irresponsible beneficiaries making foolish financial decisions with their inheritance You have a potentially taxable estate, over million per individual You would like to include creditor or divorce protection for your beneficiaries You share property with someone who is not your husband, wife, or legal partner You fear a challenge to your Will

What can happen in situations like those listed above?  In one instance, a stepmother used software to leave everything to her “children.”  Unfortunately, the state law said she didn’t have any children because she had never legally adopted her stepchildren.  As a result, it cost them more than 0,000 in legal fees to claim their inheritance.

In another case, a grandfather used software he purchased to name his grandchildren as heirs instead of his children. Skipping a generation allowed the IRS to tax his assets twice, and the grandchildren only received 20% of a 0 million estate.  He thought he was being tricky but the IRS has a lot of tricks up its sleeve – even for smaller estates.

It’s All in the Execution

Even a simple estate plan can run into trouble if all the rules aren’t followed.  For example, a Will or Trust is not considered valid unless it has been properly executed according to state law.  Some states require two witnesses for a Will. Others require three witnesses, all of whom must be present at the time the Will is signed.  And if one of those witnesses is also a beneficiary (like, for example, your spouse), that witness could be disqualified from receiving any assets distributed by your Will or Trust.

Some states allow a holographic Will, which is a Will you write entirely by hand.  Although normally a Will must be signed by witnesses attesting to the validity of the testator’s signature and intent, in many jurisdictions, unwitnessed holographic Wills are treated as valid and need only to meet minimal requirements in order to be probated.

Even if properly executed, a do-it-yourself Will may also take longer to probate because the judge may question the process used in the drafting and execution of the Will, requiring witnesses to appear in court to attest to the validity of the Will.

The Will or Trust you receive from an experienced estate planning attorney will be properly executed according to precise jurisdictional guidelines.

Do-It-Yourself Kits Cannot Create Comprehensive Estate Plans

Do you consider yourself to be “run-of-the-mill” or “boilerplate”?  No one else does, either.  One of the many pitfalls of do-it-yourself estate planning is that it is a one-size fits all approach.  Although they may provide some information and some amount of guidance, the Will or Trust cannot be tailored to your individual needs, goals, or concerns.  Almost everyone has a condition or situation that requires a unique combination of estate planning tools.

Tax planning is especially complicated.  Most people don’t know how much money they can pass, or eventually will pass, without paying taxes.  Here’s a relatively simple example:  Say that in 2009, you have more than million in assets. If you simply leave your assets to your spouse, only the first .5 million in assets is tax-exempt. The remaining .5 million would be taxed at a 45% rate, or ,575,000.  A tried and true strategy often used in those cases is to create a Family Trust to provide for your spouse and children and preserve applicable exclusions (the amount of assets that the first spouse to die can pass tax-free).

It can get even more complicated.  A Family Trust can also provide protection from an additional layer of tax if you make bequests to grandchildren.  Plus, there are complex rules regarding property you give away over your lifetime.  Do-it-yourself kits are simply not designed to cover all possible financial and taxation situations.

Blended family situations can also create difficulties. If you have children who are not adopted, using the language, “…to my children…,” in a bequest may result in those children being left out of your estate unless they are specifically named; and, in some cases, a contest between your children over who should be included which, of course, creates great family disharmony.

But Wait, There is More…

Also keep in mind that IRA, 401(k), and life insurance designations can create further complications.  If your Will bequeaths an IRA to a child but your spouse is the beneficiary, the IRA will pass to the spouse regardless of the intentions expressed in the Will.  Effective estate planning is a comprehensive and thorough process.  Errors or ineffective planning, incurred now by the use of do-it-yourself kits, could cost your heirs tens of thousands of dollars when you are gone.

An experienced estate planning attorney will do more than help you properly structure your estate plan to limit the impact of taxes and disputes, and pass on your assets.  They will not only draft your Will, but also critical estate planning documents such as a Revocable Living Trust, Durable Power of Attorney, Health Care Power of Attorney, a Living Will, and HIPAA Release creating an effective and comprehensive estate plan.

And When Things Change …

One of the biggest mistakes do-it-yourselfers make is that they don’t keep their estate plan current.  They fail to realize that creating an estate plan is just the first step in the estate planning process. You will want to review your plan periodically to make sure it accurately reflects your current goals and requirements.  Chances are your personal and financial situation will change as years go by.

A do-it-yourself kit cannot periodically review and update your plan in case of:

Marriage Divorce Birth or adoption of children Illness or incapacitation Changes in your intentions Changes in tax or non-tax laws Inheritance Change in assets Change in residence Death of family member

Even a recently established estate plan may require revision if major life or financial changes occur. And if your personal situation hasn’t changed, changes in federal or state laws can still affect your plan, which may cost you thousands of dollars by not taking advantage of new regulations.

Where There’s a Great Will… There’s a Great Way

If you don’t have a Will or a Trust, your state of residence has prepared a plan for you. The distribution of your assets will be based on the state’s intestacy laws.  While having an estate plan can be better than having no estate plan at all, your plan should precisely express your intentions.  Your estate plan should carry out your wishes precisely as you intend.  An effective estate plan will provide financial stability to your spouse, children, or other beneficiaries, protect your assets for future generations, ensure your wishes are carried out, and protect the privacy of your loved ones.

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