|
|
Definition of a Will A Will is a written document which disposes of one's property after death. A Will is also used to nominate an executor of your estate, to designate a guardian or conserator for your minor children and to create certain trusts for distributions to minors or children with special needs. Certain strict legal formalities must be satisfied to ensure that your Will is legally valid and enforceable. Types of Wills The type of Will that is best for you depends on a variety of considerations discussed below. The Law Office is prepared to discuss with you and your family the type of Will that best fulfills the needs of you and your family and is appropriate for your unique situation. Simple Will For those with modest estates and no minor children, a simple Will is likely appropriate. Candidates for simple Wills have estates significantly below the applicable exclusion amount (i.e., the value at which your estate is subject to federal estate tax, currently $2.0 million in 2008). Simple Will with Guardianship and Contingent Trusts For those with minor children and /or with elderly parents or other relatives who may not be competent to manage finances (such as minor nieces and nephews) are good candidates for Wills with guardianship provisions and contingent trusts for children. The main reason for using this type of Will is to avoid the cumbersome and expensive legal guardianship requirements that exist when a minor beneficiary inherits property. Because a court-appointed guardian is required for any property passing to a minor, the complexities and cost of such property guardianship should be avoided through proper drafting in the Will. Wills with Marital Deduction Planning Candidates for this type of Will include married couples whose estates will be subject to federal estate tax. The marital deduction does not actually eliminate any estate tax. It is simply a deferral device where the surviving spouse may inherit the deceased spouse's property without having to pay estate taxes until the surviving spouse dies. Upon the surviving spouse's death, the entire combined estate will be subject to federal estate tax. To accomplish the goal of avoiding estate tax on the death of the second spouse, and to provide financial support and security for the surviving spouse, a "bypass" trust often is used. Properly drafted, a bypass trust permits distribution of income and principal from the trust to support the surviving spouse. After the death of the surviving spouse, the property in the bypass trust is not included in the surviving spouse's taxable estate and may remin in the trust or be distributed to children or other beneficiaries. Pour-Over Wills This type of Will is appropriate for those who wish to establish a Revocable Living Trust to manage and administer their estate (see the FAQ's page for reasons why you should consider establishing a revocable living trust ). The pour-over Will is used to transfer any property that remains in your individual name (i.e., which hasn't been put in the trust) at the time of your death. Wills with Advanced Tax Planning Techniques Individuals and married couples with estates exceeding the federal estate tax exclusion amount may wish to consider a variety of different tax planning techniques to minimize their overall federal estate tax liability. For example, if you would like to distribute part of your estate to individuals who are more than one generation younger than you (e.g., a parent to a grandchild) you should consider integrating Generation-Skipping Transfer Tax Planning in your Will to take advantage of the generation-skipping transfer tax exemption. Trusts
Revocable Living Trust A revocable living trust is a trust created during the grantor's (i.e., the person who creates the trust) lifetime and which becomes effective upon execution (rather than at the time of death as with a Will). The grantor retains the power to revoke the trust and reaquire its assets at any time prior to the grantor's death or incapacity. Because the grantor is treated as the owner of the trust assets for tax purposes, the entire trust proceeds are includible in the grantor's estate. Upon the grantor's death, the living trust may continue, or the assets may be distributed directly to the trust beneficiaries without the need to pass through probate. Irrevocable Life Insurance Trust Irrevocable trusts are normally used to completely remove assets from one's estate and thereby save significant estate taxes. Because an irrevocable trust cannot be amended by the grantor, the appointment of an independent trust advisor should be considered. The independent trust advisor could make limited amendments and change trustees. Estate Planning
Power of Attorney A power of attorney is a written legal instrument which authorizes one person to act as another's agent or attorney. A power of attorney gives a person's agent or attorney authority to make financial and other legal decisions for the principal (i.e., the person creating the power of attorney). The principal can give his attorney limited or broad authority to make legal decisions for him, depending on the principal's needs and situation. A power of attorney is often used effectively to help manage a person's finances should that person become sick or incapacitated. A durable power of attorney can be drafted to enable the principal's attorney to make certain financial and other decisions for the principal in the event of his or her incapacity. It is imperative however that the power of attorney is executed before a person becomes incapacitated. Everyone should have some type of power of attorney. Mr. Pelkofer can help draft the appropriate power of attorney for you based on your unique needs and situation. Living Will A living will is a written legal document that allows you to designate a representative to make medical decisions for you should you become incapacitated due to accident or illness. For example, you can designate whether you would want to be kept on life support and who will make medical decisions for you if you are unable to do so. A living will will ensure that your instructions set forth in the living will are carried out and give the people making the important decisions on your behalf the necessary instructions and authority to carry out your wishes. Everyone should have a living will and Mr. Pelkofer can help guide you through the process. Probate Administration Probate is the court procedure used for prove the validity or invalidity of a Will. The decedent's creditors (if any) are permitted to file claims against the estate and to recover payments based on those claims. Once the administration fees, taxes and creditor's claims are paid, the rest of the estate may be distributed to the beneficiaries named in the Will. The Executor's Duties The executor is the person named by the decedent in the Will to adminster the decedent's estate. The executor's main duties include:
Mr. Pelkofer can help guide an executor through the probate process to efficiently settle an estate's affairs. WILLS, TRUSTS & ESTATE PLANNING SERVICES
Listed below is a brief summary of the types of estate planning services offered. Mr. Pelkofer will work with you to ensure that each service will be customized to meet your unique needs and situation.
|
