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Creating a Comprehensive Estate Plan   |   Creating a Standalone Living Trust   |   Amending Your Living Trust

Amending Your Other Estate Planning Documents   |   Updating Your Overall Estate Plan

Creating a Power of Attorney   |   Creating an Advance Health Care Directive   |   Creating a Last Will and Testament

Administering a Trust or Estate

Creating a Comprehensive Estate Plan

THE GOALS AND OBJECTIVES OF PROPER ESTATE PLANNING

To take full advantages to all of the opportunities and benefits available to you when creating a comprehensive estate plan, it is imperative that we plan within the context of clearly defined objectives. Below are five objectives I feel everyone should be looking to accomplish when putting together their living trust-based estate plan.

  1. A proper estate plan should blend into the background of your current life.

  2. A proper estate plan should keep your affairs out of court (and avoid probate).

  3. A proper estate plan should provide for the structured distribution of assets.

  4. A proper estate plan should avail itself of all tax opportunities available.

  5. A proper estate plan should maintain a reasonable measure of privacy.

1. Blend into the Background of Your Current Life.

First and foremost an estate plan needs to be practical and non-invasive. The overarching objective of proper planning is to provide peace of mind and ultimately increase the quality of you and your family’s lives. It would serve little utility if in so doing you were required to take upon themselves a host of additional responsibilities and inconveniences.

2. Keep Your Affairs Out of Court (and Avoid Probate)

Without proper planning, your affairs would almost always subject to court involvement should you become incapacitated or deceased. This court involvement is encompassed by the term “probate.” Probate is not an intended punishment for poor planning but rather an extremely inefficient and expensive process to administer your affairs or estate. A detailed discussion of Probate is beyond the scope of this paper, but it should be known that the process involves a judge overseeing every little asset, individual, and action. Consequently, probate can last years and drain 5% or more of the estate in fees and costs.

3. Provide for the Structured Distribution of Assets

One of the greatest advantages of a Living Trust-Based Estate Plan is not only the ability to name your beneficiaries, but also dictate how they receive their inheritances. You are free to structure distribution any way you wish. You will likely want to delay distribution to a young child until they get older; and perhaps also protect your beneficiaries from external threats such as an unforeseeable bankruptcy, lawsuit, or divorce. The ultimate distribution of your estate is entirely a personal decision, and with a near-infinite number of possibilities, you can structure your plan in any manner which is best for you and your family.

4. Take Advantage of any Available Tax Opportunities

My father would encourage me when I was younger to always look out for myself as if no one else was doing so for me. Years after I began my career, I came to learn that this advice is most relevant in the world of taxes. No matter where we are or what we do, the danger of tax liability is ever-present. Supreme Court Justice, Learned Hand once said. “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes or public duty to pay more than the law demands.” According to Justice Hand, we should all be in a perpetual state of seeking and taking advantage of tax reduction strategies. It is beyond the scope of this section to go into what those opportunities are, but you should note that every Living Trust-Based Estate Plan should minimize tax liability. And if we reflect on my father’s wise advice, we will realize that if we do not plan and seek to reduce taxes ourselves, no one else will.

5. Maintain Reasonable Privacy

This last objective piggybacks on the pains of probate and court involvement as described above. Notice to all interested parties (and the opportunity for those parties to be heard) is integral to the U.S. Court system. This publicity results in open and unrestricted access to personal information such as a list of assets, debt, and other private family matters. A living trust-based estate plan will seek to keep one’s affairs and family out of the public eye.

Although creating any estate plan is better than having no estate plan, keeping in mind these five primary objectives when creating your plan or reviewing it with an attorney will ensure that you are taking full advantage of all the opportunities available to you..

THE PARTS OF A COMPREHENSIVE ESTATE PLAN

A comprehensive estate plan consists of all of the documents needed to avoid probate, appoint individuals to act on your behalf should you be unable, and plan for the structured distribution of your estate. Below is what is included in the Comprehensive Estate Planning Package and the general purpose of each document. Where a document is an individual document (e.g., Advance Health Care Directive), one is included for each spouse in a married/joint plan.

  • Revocable Living Trust.  Appoints successor trustees to manage and administer your assets upon incapacitation or death. It also Provides a structured (and protected) distribution of assets to beneficiaries. Avoids probate, remains private, and minimizes taxes.

  • Pourover Will (and Nomination of Guardian).  Acts as a back-up to the trust in certain circumstances.  Also nominates guardians of any minor children that are alive at the time of your death.

  • Power of Attorney.  Appoints individuals to act on your behalf to manage your personal (non-medical) affairs which are not already handled by the successor trustee.

  • Advance Health Care Directive.  Allows you to preemptively make certain medical decisions for situations in the future where you are unable to provide informed consent.  Also appoints individuals to make other medical decisions on your behalf.

  • Declaration of Trust / General Assignment.  Much of how a trust works is that it is the named owner of your assets.  This serves to express a general intent that you want all of your assets to be owned and managed by the trust.

  • HIPAA Authorization.  Certain laws prohibit other individuals from accessing your medical records, regardless of whether they are a trustee or other appointed individual.  Should you be incapacitated, this document authorizes the necessary parties to access your medical records and communicate with your health care providers to better be able to handle your affairs.

  • Certification of Trust.  An executive legal summary of your living trust.  The trust contains a lot of personal information, but when dealing with financial institutions and third parties, there are only a few items of administrative information that need to be shared; the certification of trust synthesizes this information.

  • Marital Property Agreement.  Regardless of property agreements among spouses, this document clarifies that upon death, the estate plan will dictate the disposition of everything.  Note that this does not affect pre-nuptial agreements and this document is specifically void in the event of a dissolution of marriage; it does not change anyone's rights.​

  • Assignment of Personal Property.  Manifests your intent for your personal property (e.g., art, clothes, jewelry, furniture, etc.) to be owned and managed by your living trust.

  • Quitclaim Deed(s).  Transfers title of your real estate into your trust.  This is a tax-neutral transaction and there is no reassessment of property nor is there any taxable event.

  • Other Assignment Documents.  Other documents exist to ensure other assets become owned by your trust.  For example, if you are carrying a promissory note, we would include an assignment of your rights to collect under that note to your trust.

  • Final Disposition Instructions.  Instructions regarding your funeral or memorial services.

THE PROCESS OF COMPLETING AN ESTATE PLAN

A comprehensive estate plan consists of all of the documents needed to avoid probate, appoint individuals to act on your behalf should you be unable

 

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Creating a Standalone Living Trust

THE GOALS AND OBJECTIVES OF PROPER ESTATE PLANNING

To take full advantages to all of the opportunities and benefits available to you when creating a comprehensive estate plan, it is imperative that we plan within the context of clearly defined objectives. Below are five objectives I feel everyone should be looking to accomplish when putting together their living trust-based estate plan.

  1. A proper estate plan should blend into the background of your current life.

  2. A proper estate plan should keep your affairs out of court (and avoid probate).

  3. A proper estate plan should provide for the structured distribution of assets.

  4. A proper estate plan should avail itself of all tax opportunities available.

  5. A proper estate plan should maintain a reasonable measure of privacy.

Blend into the Background of Your Current Life.

First and foremost an estate plan needs to be practical and non-invasive. The overarching objective of proper planning is to provide peace of mind and ultimately increase the quality of you and your family’s lives. It would serve little utility if in so doing you were required to take upon themselves a host of additional responsibilities and inconveniences.

Keep Your Affairs Out of Court (and Avoid Probate)

Without proper planning, your affairs would almost always subject to court involvement should you become incapacitated or deceased. This court involvement is encompassed by the term “probate.” Probate is not an intended punishment for poor planning but rather an extremely inefficient and expensive process to administer your affairs or estate. A detailed discussion of Probate is beyond the scope of this paper, but it should be known that the process involves a judge overseeing every little asset, individual, and action. Consequently, probate can last years and drain 5% or more of the estate in fees and costs.

Provide for the Structured Distribution of Assets

One of the greatest advantages of a Living Trust-Based Estate Plan is not only the ability to name your beneficiaries, but also dictate how they receive their inheritances. You are free to structure distribution any way you wish. You will likely want to delay distribution to a young child until they get older; and perhaps also protect your beneficiaries from external threats such as an unforeseeable bankruptcy, lawsuit, or divorce. The ultimate distribution of your estate is entirely a personal decision, and with a near-infinite number of possibilities, you can structure your plan in any manner which is best for you and your family.

Take Advantage of any Available Tax Opportunities

My father would encourage me when I was younger to always look out for myself as if no one else was doing so for me. Years after I began my career, I came to learn that this advice is most relevant in the world of taxes. No matter where we are or what we do, the danger of tax liability is ever-present. Supreme Court Justice, Learned Hand once said. “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes or public duty to pay more than the law demands.” According to Justice Hand, we should all be in a perpetual state of seeking and taking advantage of tax reduction strategies. It is beyond the scope of this section to go into what those opportunities are, but you should note that every Living Trust-Based Estate Plan should minimize tax liability. And if we reflect on my father’s wise advice, we will realize that if we do not plan and seek to reduce taxes ourselves, no one else will.

Maintain Reasonable Privacy

This last objective piggybacks on the pains of probate and court involvement as described above. Notice to all interested parties (and the opportunity for those parties to be heard) is integral to the U.S. Court system. This publicity results in open and unrestricted access to personal information such as a list of assets, debt, and other private family matters. A living trust-based estate plan will seek to keep one’s affairs and family out of the public eye.

 

Although creating any estate plan is better than having no estate plan, keeping in mind these five primary objectives when creating your plan or reviewing it with an attorney will ensure that you are taking full advantage of all the opportunities available to you..

THE PARTS OF A COMPREHENSIVE ESTATE PLAN

A comprehensive estate plan consists of all of the documents needed to avoid probate, appoint individuals to act on your behalf should you be unable, and plan for the structured distribution of your estate. Below is what is included in the Comprehensive Estate Planning Package and the general purpose of each document. Where a document is an individual document (e.g., Advance Health Care Directive), one is included for each spouse in a married/joint plan.

  • Revocable Living Trust.  Appoints successor trustees to manage and administer your assets upon incapacitation or death. It also Provides a structured (and protected) distribution of assets to beneficiaries. Avoids probate, remains private, and minimizes taxes.

  • Pourover Will (and Nomination of Guardian).  Acts as a back-up to the trust in certain circumstances.  Also nominates guardians of any minor children that are alive at the time of your death.

  • Power of Attorney.  Appoints individuals to act on your behalf to manage your personal (non-medical) affairs which are not already handled by the successor trustee.

  • Advance Health Care Directive.  Allows you to preemptively make certain medical decisions for situations in the future where you are unable to provide informed consent.  Also appoints individuals to make other medical decisions on your behalf.

  • Declaration of Trust / General Assignment.  Much of how a trust works is that it is the named owner of your assets.  This serves to express a general intent that you want all of your assets to be owned and managed by the trust.

  • HIPAA Authorization.  Certain laws prohibit other individuals from accessing your medical records, regardless of whether they are a trustee or other appointed individual.  Should you be incapacitated, this document authorizes the necessary parties to access your medical records and communicate with your health care providers to better be able to handle your affairs.

  • Certification of Trust.  An executive legal summary of your living trust.  The trust contains a lot of personal information, but when dealing with financial institutions and third parties, there are only a few items of administrative information that need to be shared; the certification of trust synthesizes this information.

  • Marital Property Agreement.  Regardless of property agreements among spouses, this document clarifies that upon death, the estate plan will dictate the disposition of everything.  Note that this does not affect pre-nuptial agreements and this document is specifically void in the event of a dissolution of marriage; it does not change anyone's rights.​

  • Assignment of Personal Property.  Manifests your intent for your personal property (e.g., art, clothes, jewelry, furniture, etc.) to be owned and managed by your living trust.

  • Quitclaim Deed(s).  Transfers title of your real estate into your trust.  This is a tax-neutral transaction and there is no reassessment of property nor is there any taxable event.

  • Other Assignment Documents.  Other documents exist to ensure other assets become owned by your trust.  For example, if you are carrying a promissory note, we would include an assignment of your rights to collect under that note to your trust.

  • Final Disposition Instructions.  Instructions regarding your funeral or memorial services.

THE PROCESS OF COMPLETING AN ESTATE PLAN

A comprehensive estate plan consists of all of the documents needed to avoid probate, appoint individuals to act on your behalf should you be unable

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