As estate planning attorneys, we find that people often ask us many of the same questions when we sit down to discuss things for the first time. With this in mind, we will provide a hypothetical conversation between one of our lawyers and a prospective new client in this post.
The Internet makes it easy to draw up your own will, right?
There is no law stopping you from using a boilerplate document that you get off the Internet to try to create your own last will. This being stated, the highly regarded, purely objective publication Consumer Reports advised against DIY estate planning a few years ago.
Aren’t trusts only for wealthy people?
No, there are reasons why people of ordinary means could benefit from the utilization of a trust of some kind.
What type of trust would this be?
The revocable living trust is a very versatile estate planning tool that is the right choice for a wide range of different people.
Can you explain the advantages?
One of the major positives that go along with the utilization of a living trust instead of a last will is the avoidance of probate. This is a costly and time-consuming legal process that would enter the picture if you use a will as the centerpiece of your estate plan.
The estate administration process is simplified when a trust is used, because all or most of the assets that comprise the estate would be contained within the trust. You have the ability to include spendthrift protections with a living trust, and this is another major advantage.
Is there another trust someone who is not a multimillionaire might use?
The majority of senior citizens will eventually need some form of living assistance, and 35 percent of elders will eventually reside in nursing homes. A year in a nursing home can cost somewhere in the vicinity of $100,000, and Medicare does not pay for this type of care.
Medicaid will pay for some long-term care if you can qualify, but there is a low $2000 asset limit. It would be possible to convey assets into an income-only Medicaid trust to get resources out of your own name so that you can qualify for Medicaid to pay for a stay in a nursing home.
This is one additional type of trust that can benefit someone who is not very wealthy, but there are others.
Are there any necessary estate planning documents that people often overlook?
Yes, when you are planning your estate, it is important to prepare for the events that could befall you before you pass away. Though it is a rather disconcerting thing to consider, a significant percentage of elders become unable to make sound decisions at some point in time.
To account for this, you could take steps in advance to name representatives to act on your behalf if it ever becomes necessary. This is done through the execution of legally binding documents called durable powers of attorney.
You could name an agent to make health care decisions for you in one of the devices, and you could add a durable power of attorney for property. Another incapacity planning document that should be part of your plan is a living will. This type of will is used to state your life-support preferences.
Download Our Estate Planning Worksheet!
Our firm has devised a worksheet that you can use to gain a thorough understanding of the process. It is being offered on a complimentary basis right now, and you can access your copy if you head over to our estate planning worksheet download page.