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 getoff the Internet to try to create your own last will.This being stated, the highly regarded, purely objective publication ConsumerReports 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 theutilization 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 isthe 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 livingtrust instead of a last will is the avoidance of probate. This is a costly andtime-consuming legal process that would enter the picture if you use a will asthe 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 containedwithin the trust. You have the ability to include spendthrift protections witha 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 livingassistance, and 35 percent of elders will eventually reside in nursing homes. Ayear in a nursing home can cost somewhere in the vicinity of $100,000, andMedicare does not pay for this type of care.
Medicaid will pay for some long-term care if you can qualify, but there is alow $2000 asset limit. It would be possible to convey assets into an income-onlyMedicaid trust to get resources out of your own name so that you can qualifyfor Medicaid to pay for a stay in a nursing home.
This is one additional type of trust that can benefit someone who is notvery 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 theevents that could befall you before you pass away. Though it is a ratherdisconcerting thing to consider, a significant percentage of elders becomeunable to make sound decisions at some point in time.
To account for this, you could take steps in advance to name representativesto act on your behalf if it ever becomes necessary. This is done through theexecution of legally binding documents called durable powers of attorney.
You could name an agent to make health care decisions for you in one of thedevices, and you could add a durable power of attorney for property. Another incapacityplanning document that should be part of your plan is a living will. This typeof 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 understandingof the process. It is being offered on a complimentary basis right now, and youcan access your copy if you head over to our estate
planning worksheet download page.
- What You Need to Know about Elder Abuse - May 18, 2023
- Celebrate Older Americans Month This May - May 16, 2023
- Why Incapacity Planning Should Be Included in Your Estate Plan - May 11, 2023
