Wills | Taneff Law

Estate Planning: Creating a Will or Living Trust

Approximately 60% of Americans do not have either a will or living trust, leading to numerous problems for heirs upon their death.

Generally, a trust exists when a person, or the grantor, gives property to another, the trustee, to hold and manage for other persons, called beneficiaries. A living trust is one that can be amended or revoked by the grantor during his or her lifetime and he or she maintains all benefits of the property placed into the trust. Advantages to creating a living trust instead of a will include avoiding probate and its ensuing costs and privacy in administration. However, a living trust is more time consuming than creating a will and will not be supervised or reviewed by a court.

A will, though less expensive to create, is subject to probate and therefore additional costs such as court costs, appraisal fees, executor’s commissions, and attorney fees. In addition, terms of a will, including names of beneficiaries, are a matter of public record once it is filed with the probate court. Even when a living trust is created, a will is still necessary, as it is the appropriate document to name guardians of minor children or to name an executor to allocate assets not transferred to the trust during the grantor’s lifetime.

Heirs and beneficiaries can challenge the validity of both living trusts and wills, though the time periods in which to do so differ. A living trust can typically be challenged for up to two years, while contesting a will must be done within three months. These documents can be found invalid for incompetence at the time of creation or for undue influence from others.

Consulting with an attorney can help determine whether a living trust or will is more appropriate and likely to accomplish personal goals. Though many online companies offer assistance in creating wills or trusts for a small fee, these services usually lack the ability to handle complex estates. Other inexpensive estate planning resources can be found through Legal Aid and Bar Associations.

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ESTATE PLANNING IN THE DIGITAL WORLD

Filed under: estate planning Tags: estate planning, wills

Many aspects of our lives are now online.

When one becomes disabled or dies, access to personal or financial online accounts and contacts can be lost or are of little value if a family member doesn’t know of their existence. Even if they have account information, access can be problematic.

As businesses move away from paper, it becomes more difficult to locate and access online information, especially if someone dies without sharing this information. Most internet companies have strict privacy policies that might complicate internet access, which will delay the release of username and password information without a fight.

Consider giving your heirs (or someone you trust) access to information that may be stored online, such as photographs, videos, letters, etc. These things may not have monetary value but may be priceless to loved ones. This includes e-mail accounts, online banks and brokerages, automatic bill-paying arrangements, and Facebook, Linked-In or Twitter pages.

As our computer literate population ages, lawsuits after disability or death are likely to increase and could end up forcing family members to unnecessarily deal with these issues.

So, in preparing your estate planning documents consider who will have access to your computer and online passwords.

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ESTATE PLANNING: THE DIFFERENCES BETWEEN A WILL, A LIVING WILL AND A LIVING TRUST

Filed under: estate planning Tags: estate planning, wills

When you are thinking about estate planning, almost every single adult person should have a Will, a Living Will, and possibly a Living Trust.

A Will is a document that declares what your intentions are with respect to your estate after you pass away. A Will can decide how your assets are distributed after your death. If you die without a Will, then this is called dying “intestate” and the laws of your State will determine who gets what and at what age. A Will can also designate a Guardian of a minor child and who controls the money for that minor child until adulthood.

A Living Will deals more with healthcare and right-to-die issues if the individual is no longer capable of making these decisions for themselves and the person they have designated cannot or will not make end-of-life decisions. A Living Will is a statement and a declaration to the world of what your intentions are with respect to the termination of life support and/or the provision of life support.

A Living Trust is a document that you create during your life which allows you to control distribution of your estate. With a Living Trust, it can be funded during your lifetime or after you pass away if a Pourover Will exists to fund any other assets that may not have been funded during your lifetime. A Living Trust can assist in avoiding or minimizing estate taxes. A Living Trust can also prolong distribution beyond the age of 18 or 21 for a beneficiary. The Living Trust holds title to the assets and not the individual. A properly funded Trust can also help to avoid probate.

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Five Ways to Avoid Probate and Trust Litigation

Filed under: estate administration, estate planning Tags: estate administration, estate planning, probate, wills

Written by Wight Auction

Litigation after the death of a loved one is never easy. It often pits relatives against relatives and can be very stressful. It is not something you want to happen when your loved ones are already dealing with their loss. How can you make sure your loved ones don’t fight or become involved in litigation over your estate?

Here are some things you can do to help avoid litigation:

1. Communication. Inform your heirs if you are making a distribution that is “not natural.” A “natural” disposition is when you leave your estate to your heirs such as your children and grandchildren. An “unnatural” disposition is where you disinherit your natural heirs and leave your entire estate to someone you have known for 6 months, for example, or a caregiver, or other distant family members or charities. It is of course up to you who you choose to inherit your estate but it will help to avoid discord later if you tell your heirs what you are doing. You can discuss it with them or leave them a letter of explanation. Litigation develops when the individuals who thought they would be receiving an inheritance find out after your death that they were disinherited or will not be receiving an asset or a portion of your estate that they thought they were getting. So if you do want to exclude a child, for example, or make an uneven distribution of your estate among your children, tell them about it or in some manner explain it so it doesn’t come as a complete shock.

2. Have properly prepared legal documents. Make sure your estate planning documents are properly prepared. So often, litigation arises because of wills or trusts that were not properly drafted in the first place. If you are concerned about someone contesting your will or trust, you certainly don’t want to do it yourself or use a “trust mill” or online service. You want customized properly drafted documents so there is no ambiguity as to your wishes. Also, most estate planning lawyers also do trust administration. Frequently it is the case that surviving family members will call the lawyer that drafted the estate plan, so choosing a trusted lawyer that you can work with during your lifetime may also be someone that can assist your family upon your death.

3. Keep your estate planning documents up to date. If you have neglected to update your trust to add or remove beneficiaries after a death, divorce, or other changed circumstance, or worse yet, neglected to change payable on death designations, you are asking for trouble. An up to date estate plan (which includes a trust, pour over will, and powers of attorney for asset management and health care) makes it less likely for uncertainty upon your death. Also necessary as part of the periodic review of your estate plan is to have the beneficiaries updated as necessary on life insurance polices, IRAs, pension plans, etc. The last thing you probably want is your ex-spouse receiving life insurance benefits when you were divorced 10 years ago.

4. Include “no contest” clauses in your estate planning documents. Most wills and trusts have a “no contest” clause. This can discourage disputes over a will or a trust because it provides that someone who contests certain provisions in your estate plan will not be entitled to an inheritance. Depending on where you live, some “no contest” clauses can be easily overcome.

5. Don’t forget to provide for your personal property. Dividing up personal property and family heirlooms is another area which, believe it or not, can become a battleground. Family members sometimes hold up the rest of the estate administration over property that has little monetary value but has great sentimental value. Unless you have left specific instructions, your personal property will be divided up among the beneficiaries. But how does you executor or trustee know how to determine an equal distribution of items that have sentimental value? What do you do if both daughers want (and may have been promised) grandmother’s ring? If you have personal property and you want it to go to a certain family member or a friend, there are several ways to do it. You can make a specific bequest of an item in your will or trust. This is a preferable way for items of value. You can also execute a personal property memorandum listing each item and who is to receive it. This can be changed or added to at any time before your death. There are even online auction sites that will divide up the personal property among family members if you sign up before your death.

Taking the time to incorporate some of these ideas into your estate planning can avoid disputes over your estate that are not only costly in terms of money but also in terms of family harmony.

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Planning For The Future: What To Consider When Considering a Will or Trust

Filed under: estate planning Tags: estate planning, probate, wills

I came across a telling statistic on the internet recently. Nearly twice as many Americans have cell phones (240 million) than have a will (126 million). And while I am wholly dependent on my cell phone, as an attorney who handles hundreds of probate cases annually, I can say unequivocally a will, perhaps even more than a cell phone, is something everyone should have. But clients regularly ask me if they have a will do they need a trust too? Or is one better than the other? To answer these questions let’s first look at the reasons a person should consider each.

Why a Will
No one should be without a will. A will simply put spells out your wishes. It reflects how you want your assets distributed. Without a will, the probate court will make decisions regarding who is in control and the State of Ohio decides who gets what. With a will you can control when a minor gets a hold of their inheritance only until the age of 21.

Many times clients with few assets think they don’t need a will. This isn’t the case. Regardless of how much you have, if you have minor children you must have a will. A will is critical to name a guardian if both parents are unable to raise the kids. If you have neglected to name a guardian in your will then you are at the mercy of the court to appoint someone. It’s wise to get approval from your potential guardian and to also name an alternate guardian.

Why a Trust
A trust can offer different benefits. A trust should be created when one wants to hold back their assets and distribute them over time. When setting up a trust you will need to select a trustee. Instructions are written that specify how the trustee holds and manages the assets and then gives them away over time. With a trust you can control money for a child beyond the age of 21 or keep the money in your bloodline after your death rather than having it end up with a child’s spouse should the child die or divorce. A trust can also provide a lifetime use of assets and ensure property stay within a family.

Will vs. Trust
Both wills and trusts are valuable estate planning documents. In fact in all cases when someone has a trust they also need a will to ensure if the trust is not completely funded the assets in the will pour over into the trust. But there are also minor distinctions that can make one or the other a better option in particular situations.

Probate – In most cases, wills must go through the formal probate process. Most wills are handled within 3 to 9 months, but if an estate is large, complex or contested your heirs can face a complicated process lasting several years. And in most cases, beneficiaries won’t receive their inheritance until after probate is concluded. If you have successfully transferred all your assets to your trust, probate can be avoided. That means decisions regarding assets aren’t held up nor are payments to beneficiaries.

Privacy – Once a will is probated, it becomes public record. The will’s terms and assets are revealed. If a trust is properly funded, it’s more likely your privacy will be maintained and you can transfer property without public scrutiny. The terms of a trust and the assets are typically not public knowledge.

Expense – In general, trusts cost more than wills to create. But the savings can be offset by the potential expense of probate. In addition, when an estate is probated, “statutory “fees are paid. Those are calculated based on the size of the estate.

Ease – Upon proper execution of a will, the job is complete. Careful administration of a trust over one’s lifetime is a bit more involved.

Taxes – With a trust one can reduce or avoid the effect of Federal Estate Taxes. In 2008, assets up to $2-million dollars are exempt from Federal Estate Taxes. With a carefully constructed Living Marital-Family Trust, you can effectively “shield” up to $4-million dollars for your heirs and avoid Federal Estate Taxes.

Many attorneys will advise their clients to choose between a will and trust based simply on the value of their estate. In Ohio if your estate is valued at less than $35,000 you can be relieved from full probate administration. Then a will should suffice.

Ultimately though, everyone’s circumstances are different. A consultation with a probate/estate planning attorney may be the best way to determine how to leave your loved ones what you have. And in the end, you can’t put a price on peace of mind.

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