As inheritance planning attorneys, we sometimes hear from people that are looking for damage control solutions because deceased family members did not take the appropriate actions. In many cases, these situations stem from incorrect assumptions that were made.
With this in mind, we will look at a handful of these situations here in an effort to underscore why it is important to act in a fully informed manner when you are planning your estate.
You Don’t Really Need an Estate Plan
There are individuals that know that in a perfect world, they should have some type of estate plan in place. However, they are not too concerned about it, because they are under the impression that the state will take care of everything effectively if they never get around to it.
It is true that the probate court would step in to supervise the estate administration process when someone dies intestate or without an estate plan. However, this is a rather complicated, time-consuming process.
And at the end of it, the assets would be distributed in a manner that may not be consistent with the wishes of the decedent.
Inheritance Planning Lawyers Are Too Expensive
While it is true that there will be some expenses involved if you engage an estate planning attorney to help you construct your plan, there is the matter of value. When you put out some money, but you get something in return that is well worth it, you are looking at a win-win situation all the way around.
The negative results that can come about due to a lack of proper planning can be much more costly in the long run. After all, inheritance planning involves passing along everything that you have been able to accumulate throughout your life to the people that you love the most. This is a profound endeavor, and it should be done right.
Trusts Are Only for the Wealthy
This is one of the most commonly embraced misconceptions. Yes, it is true that there are certain types of trust that are used by high net worth individuals that are exposed to the federal estate tax. However, there are other trusts that are ideal for people of relatively ordinary means.
A revocable living trust is a widely utilized estate planning tool that provides many advantages over a last will. One of them is the facilitation of probate avoidance.
We touched upon the existence of the probate court in the section about intestacy, and it does serve a purpose. However, the heirs do not receive their inheritances while the time-consuming process is underway, and there are considerable expenses that can accumulate.
Another negative is the fact that it is a public proceeding, so anyone that is interested can access probate records to find out how the resources were distributed. When a living trust is used, these drawbacks do not enter the picture, because the trustee could distribute assets to the beneficiaries outside of probate.
In addition to the revocable living trust, there are other types of trusts that serve specific purposes. For example, a very significant percentage of elders will require nursing home care eventually, and Medicare will not pay for a stay in an assisted living facility.
Medicaid will cover these costs, but it is a need-based health insurance program, so you cannot qualify if you have more than $2000 in countable assets. As a response, you could establish an income only Medicaid trust to get assets out of your own name.
You would be able to continue to receive income that is earned by assets in the trust, but the principal would not count if you were to apply for Medicaid. These are a couple of examples of trusts that can be useful for people that are not among the financial elite, but there are some others.
Take Action Right Now!
Our doors are open if you would like to discuss your inheritance planning goals with a licensed attorney. You can give us a call at 513-721-1531 to schedule a consultation, and there is a contact form on this website that you can use if you would like to send us a message.