Life is full of changes, including your own opinions and views. To ensure your estate plan reflects those changes, it needs to be reviewed and updated on a regular basis.
Some changes in life that might affect a change in your estate plan include:
In addition to life events, there are also changes in state laws, federal statutes and regulations and tax laws. These changes can require revisions to your documents. Fortunately, a good estate planning attorney will always know when this type of change is required.
So, how often should you update your plan?
If there’s an event in your life, a review with your estate planning attorney is probably a good idea. In addition to revisions resulting from life's changes, the clients at Anderson, Dorn & Rader, Ltd. know they can attend the annual client appreciation events. At the next event, we will be introducing a formal maintenance program. The estate planning lawyers think you'll find this to be well worth your time and expense. A regular review of your estate plan ensures that your always up-to-date.
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"Fiduciary" is a term that describes a relationship of trust between two parties. This position of trust gives the fiduciary the ability to act on behalf of the other party. Your attorney for example, would act in a fiduciary capacity while representing you in court. Likewise, the person or persons who manage your retirement plan and its many investments are also acting in a fiduciary capacity.
In the world of estate planning, there are a number of areas where you will need a fiduciary. Here's a few of the more common fiduciaries:
This person will look after your estate in accordance with the wishes you've expressed in your will. You can appoint an institution, bank, trust company or one or more individuals for this purpose.
If you set up a Living Trust or some other type of trust then you would appoint individuals and/or an institution as Trustees to handle the assets of the Trust in the event of your death or disability.
This type of fiduciary will take medical decisions on your behalf and in accordance to your wishes listed in your Advance Medical Directive. A Healthcare Agent has to be a person and not an institution.
This agent will manage assets that are titled specifically and individually in your name. You can appoint a bank, trust company, or individuals as this type of fiduciary.
This fiduciary will look after your minor children if you die or become incapacitated.
When you meet with your estate planning attorney, be prepared to discuss who would meet the appropriate criteria for each of these fiduciary positions. Your attorney can assist you in making those choices, but the final decision must always be you. If you don't already have an estate planning attorney, contact Anderson, Dorn & Rader, Ltd. in Reno, NV.
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Most people have heard of a will and many assume that it's the basic estate planning document. Others assume it's the only document necessary to settle an estate. The will is a necessary document. While passing on assets typically requires a probate will, your family will at least have a legal document establishing the manner in which assets will pass to named beneficiaries.
While a will can take care of many things, there are some assets not covered by this legal document. As a general rule, wills only cover assets that you own, such as your belongings and assets that are titled in your name. Wills do not govern other legally binding documents that have the ability to “stand on their own” without the need for a Will.
One example of this type of asset is life insurance. A life insurance policy is a legally binding document that names the beneficiary and the amount to be paid. Upon your death, the terms of this document will be executed without reference to a will, so it is considered separate and will not be subject to the probate process. The same is true of retirement plans.
There are also other assets that may have TOD (‘transfer on death’) and POD (‘paid on death’) attached to them, such as bank accounts and savings bonds. This means that upon death, these assets will be transferred or paid to your nominated beneficiaries, regardless of what your will might say.
Any assets jointly owned will also pass automatically to the other person upon your death. The will does not direct this. Now, even though the above assets are not covered by a will, it’s still advisable to have one.
A will can cover a variety of property, ensuring that your belongings and assets are distributed the way you want. It can also establish a trust for minor or disabled dependents, leave money to charity, and handle a number of other issues upon your death.
Knowing what is and what is not covered by your will is the first step in planning your estate. Because each person is different, it’s best to have a good estate planning attorney guiding you through the process. The estate planning lawyers at Anderson, Dorn & Rader, Ltd. can help!
While no one likes to think about a time when they're no longer around, we all secretly wonder the same things: Will my spouse have enough to live on when I'm not there? Will I be able to leave a legacy for my children? Will the family home stay in the family, or will it have to be sold to pay off creditors and taxes? This is why estate planning is important and necessary.
Estate planning is simply a way to protect your assets and your loved ones by creating legally valid documents that address a variety of concerns. Do you have a child that has special needs? Then a special needs trust might be the solution for you. This type of trust allows you to provide for a disabled or incapacitated dependent without affecting their eligibility for government-assistance programs. This trust can also be a component of a larger family trust, often called a Living Trust, that shields your assets from probate, minimizes taxes and even provides a way to give your heirs incentives for going to college, getting a job and similar personal growth accomplishments.
A good estate plan will also include a Powers of Attorney which are documents designed to designate someone to step in and speak on your behalf in financial and medical matters. In addition, you should have Advance Directives (a living will and health care power of attorney) that tells your healthcare providers how to handle life support and resuscitation matters.
In a nutshell, your estate plan is something you really can't do without and it's important that you have all of the key essentials. Hire an estate planning attorney! Anderson, Dorn & Rader, Ltd. has experienced estate planning lawyers that you can trust.
You've completed your estate plan and you feel like a major weight is off your shoulders. Keep in mind, however, that this is not a one-time process. Remember, changes in your life might affect your estate plan.
For example, any of the following instances in your life would require you to make changes in your estate plan: marriage or divorce, birth of children, adoption, receiving an inheritance, selling or buying a business or property, winning the lottery, retirement, or moving to a new state.
Any of these changes in your life will require you to reevaluate your estate planning choices. When possible, it is always a good idea to plan a meeting with your estate planning attorney before the changes actually take place. You may want to update your plan because you wish to change beneficiaries or change the share being given to a particular beneficiary. You might change your opinion about people or loved ones. Your family structure might undergo a change. All these instances would require a change in your estate plan.
Apart from changes in your own life, tax and estate planning laws also keep changing. There may be new strategies of which you wish to take advantage. In all probability, a change would affect your estate plan, requiring an update.
If you are a client of Anderson, Dorn & Rader, you know the best way to avoid missing a required update or revision in your estate plan is to attend our annual client appreciation event. At our next event you will be invited to participate in an annual maintenance program that will allow you to be aware of law changes and to amend your trust for no additional fee, in many cases. In any case you should schedule a regular estate plan update every three to five years. Like a fine automobile, your estate plan will function more smoothly when the time comes to use it if it has regular checkups and service. If it has been a few years, give us a call and let's review it together.
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Are you thinking about creating joint accounts to avoid the process of probate? These co-owned accounts are a common way to assure that your funds pass quickly to your loved ones without the need for probate. You should be aware, however, there are some pitfalls involved in joint accounts that you will need to consider.
A joint account can transfer to the surviving account holder(s) upon the death of another joint owner. For this to happen, the survivor(s) will need to provide a death certificate to the institution where the account is held.
Perhaps you wish for more than one person to inherit the money in a joint account. Unless their name is on the account, they will not, even if you have so stated in your will or trust. The only way for another person to have a share of this money, if they are not on the account, is for the surviving account holder(s) to gift it to them. Because the funds in the account are now owned by the survivor, making such a gift may cause your loved ones to pay a gift tax if the gift is over the annual exclusion amount.
Another issue arises when one of the account holders has not contributed money into the account. When this is the case, if the account owner dies and the money passes to non-contributors, these funds may be considered a gift and the gift tax may be applicable.
Joint accounts are especially troublesome when there are creditors of one of the account holders. If one of the account holders loses a lawsuit, the account may be frozen or garnished to cover the liability. For this reason many people should avoid holding joint accounts.
What if you wish to leave your account holdings to a child who is still a minor? If you put the child on your account, upon your death your account will be controlled by a court appointed guardian until the child reaches eighteen. Then at age eighteen the entire account is available to that young person.
It is usually a better option to have the accounts held in a revocable living trust. In the event of disability, the trustee will still have access to your account, but their creditors will not. If the beneficiary is still too young, it can remain in trust and made available for their education and other needs, but not turned over to them until an age when they are more likely to have matured.
Joint accounts can be one among many useful estate planning tools. They are simple to set up and administer, but they may have serious disadvantages. Be sure to visit a qualified estate planning attorney to become fully informed.
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While a living trust and living will may sound similar they are actually two quite different things.
A living trust is designed to help protect and distribute your assets. The assets are actually titled in the name of the trust and depending upon the terms of your trust, you may have complete control or hand the management of the trust over to someone else. Upon your death, beneficiaries receive the assets according to your terms in the trust. A method of avoiding probate, it’s a way of bypassing the lengthy and often expensive court process of distributing your assets.
A living will, however, is a legal way of informing your physician what you want done in case of a terminal condition. It’s used when you can no longer communicate your wishes due to an injury or illness that leaves you incapacitated. Your living will should be accompanied by a health care power of attorney. This document designates a person to speak on your behalf and relay your wishes with regard to certain medical treatments and decisions. It might relate to resuscitation, feeding tubes, etc. These "advance directives" also give loved ones peace of mind knowing that they are doing what you would have wanted.
It’s highly recommended that everyone draw up advance directives including a living will and a health care power of attorney, whereas a living trust is especially beneficial for those with a certain level of assets. To get help with a living will or living trust, a good estate planning attorney is your best bet.
