Make your wishes known

  • Jeffrey Crocker —Monitor file

For Active Aging
Published: 4/22/2019 1:55:17 PM

You should have proper estate planning documents in place to protect yourself and your assets in the event of your incapacity, and so that you can control what happens to your assets after you die.

If you do not have a will, or other appropriate estate planning documents in place before you die, your assets will be distributed according to the law of intestate succession in the state in which you live at the time of your death. Do not assume that the laws of intestate succession will reflect your wishes, very often, they do not.

Here is a list of the documents that you should consider having as part of your estate plan:

Last will and testament: A last will and testament will transfer property owned by you at your death by use of the probate transfer process. Having a last will and testament will help ensure that your assets are distributed in the manner you intend following your death.

The will may include nomination of a guardian to be responsible for a minor or incapacitated heir’s personal care and/or assets.

The will may include a testamentary trust for minors or incapacitated heirs to manage assets after death, and control and defer distribution of assets.

For some people, having a trust may not be necessary and a simple will is an appropriate choice. For others, a will and one or more trusts may be beneficial.

Revocable Trust: Together with appropriate supporting and funding documents, a revocable trust avoids the cost and time delays associated with probate administration following your death.

The trust preserves privacy in the administration of the trust following your death.

In order to avoid probate, the trust must be funded during your lifetime by changing the title on most of your assets (bank and investment accounts, personal property, and real estate for example) from your individual name to the name of your revocable trust.

Income, dividends, gains and losses will continue to be reported on your individual tax return while you are living.

It is important to transfer the title to real estate located in another state to your trust (or to a limited liability company or family limited partnership) in order to avoid probate being required in another state.

If you own a business, discuss with your professional advisor whether you should transfer your business ownership to your trust.

If you are married, discuss with your professional advisor whether you should have a joint trust with your spouse or whether you and your spouse should have separate trusts for estate tax planning, creditor protection, or other reasons such as protecting children from a prior marriage or ensuring continuation of a family business.

A pour over will accompanying your revocable trust will transfer assets into your revocable trust that remain outside the trust at the time of your death (alternative to last will and testament above) but will require probate.

Joint ownership documents: Joint ownership of assets causes an automatic transfer of your property to the surviving joint owner at your death.

Joint ownership is often referred to as joint tenancy.

Joint tenancy avoids probate and is not affected by your will.

However, joint tenancy may result in loss of control, and possible gift, estate and/or income tax implications.

Beneficiary designations: Beneficiary designations govern life insurance, retirement assets such as IRA’s, 401-k and 403-b retirement plans, annuity survivor/death benefits, and other pay on death proceeds.

You must complete the proper beneficiary designation forms and submit them to the company or administrator in charge of death benefits.

These assets pass to the named beneficiary upon your death and therefore do not need to be retitled into your trust during your lifetime.

Both primary and contingent beneficiaries should be named. Beneficiaries can be persons, charitable organizations, or your trust. However, before naming your trust as beneficiary, a professional advisor should be consulted for advice tailored to your circumstances.

General Durable Power of Attorney: A durable general power of attorney names an individual to act for you in the event of your incapacity.

Advance Directive for Health Care: An Advance Directive (or Durable Power of Attorney for Health Care and Living Will) names someone to make health care decisions on your behalf if you are unable to do so yourself, and to allow a person to die with dignity and not be kept alive by a machine under certain conditions.

(Jeffrey Crocker is an attorney with Upton & Hatfield.) 


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