An estate plan is a set of documents created to:
Estate plans usually include a Trust, a Will, a Durable Power of Attorney for Financial Affairs, and an Advance Health Care Directive. Estate plans for larger or more complex estates may include irrevocable or complex trusts.
Both documents are created to ensure that your property passes to your intended beneficiaries at your death. The major difference is that a Will is subject to probate and a Trust is not. When a person dies with a Will, their estate is subject to “probate” which is explained below. (One very important exception is that there is typically no probate required when a married person gives their entire estate to their spouse.) Assets transferred to a Living Trust do not go through probate.
The two most compelling reasons for creating a Living Trust are probate avoidance and the mitigation of federal estate taxes. Most clients choose a Trust because it is easier and less expensive to administer than a Will. However, simple Wills are often appropriate for older clients of limited means and young clients with no children. In general, a Trust becomes more attractive as your estate gets larger and you get older. Couples with children from a prior marriage will usually need a Living Trust.
Probate is a court-supervised process of collecting the assets of a decedent and distributing those assets to his or her heirs. Probate generally costs more and takes longer than a trust administration. Probate takes at least nine months and the fees are roughly 3% of the value of the estate to the executor and 3% to the attorney for the executor.
When the decedent has a Trust, the successor trustee performs essentially the same functions as the executor of the estate, but without court supervision. A trust administration is often completed in less than nine months (unless federal estate taxes are due) and the legal fees are often less than 1% of the value of the trust estate.
Estate taxes are an issue if your estate (or the combined estate of husband and wife) approaches the federal “Applicable Exclusion Amount.” The “Applicable Exclusion Amount” is a complicated way of saying “the amount that each person can give away – during lifetime or at death – without paying federal estate taxes.” The Applicable Exclusion Amount for 2016 is $ 5,450,000 per person.
No. While it is possible for a successor trustee to complete an entire trust administration without legal advice, most will need an attorney to help them with the administration.
Please bring a completed Client Estate Information Form, which can be downloaded here, copies of your current Will or Trust, and copies of the grant deed to any real estate you own.
First you should decide what individuals or charities you would like to name as beneficiaries of your estate. In addition, please consider the following:
The executor or trustee is the person (or persons, if you name cotrustees or coexecutors) who will collect all of the assets in your estate when you die, pay any taxes and creditors, and distribute the assets to your intended beneficiaries.
It depends on your particular circumstances. A complete estate plan for a married couple, including a Living Trust, usually costs about $3000.
We become your attorneys after you have met with us, provided us with a completed Client Estate Information Form and any other necessary documents, and signed a written fee agreement. At our initial meeting we will recommend a course of action and give you an estimated cost for the work to be performed. If you decide you’d like to hire us, we will sign a written fee agreement.