After doing estate planning over 20 years, I can offer this simple advice: The best estate planning you can do is to maintain good relationships with your family. Estate planning documents are very important to avoid probate and to provide an orderly and efficient transfer of your assets. But the best drafted living trust cannot restore bad relationships.
The fresh start that comes with the turn of the calendar is a good time to take simple steps to protect your family.
If you already have a living trust estate plan:
- Are your “Role Players” up to date and still the people you want in those roles – Guardians to raise your minor children, Successor Trustees to manage your assets if you become incapacitated or when you pass away to administer your living trust, and Health Care Agents to make health care decisions for you if you cannot?
- Is your trust Funded? Are your assets titled in your living trust? One of the main reasons you established your living trust was for your children to avoid the high cost and burden of probate. If you have refinanced since you set up your trust, your home may no longer be titled in your trust and will go through probate. Have you transferred title of your non-retirement plan investment accounts and bank accounts to your trust? If not those accounts may have to go through probate.
- Do you have enough Life Insurance? If you have young children, you should have at least a large term policy for you and for your spouse, and the beneficiary of the policies should be your living trust.
- Have you named the contingent beneficiaries of your Retirement Plans? You’ve probably named your spouse as primary beneficiary. But have you named your children as contingent beneficiaries? And if you have retirement plans of more than $200,000, you may want to use a Stand Alone Retirement Plan Trust to protect the funds for your children from divorce claims and lawsuits.
If you haven’t done your estate planning yet:
You should. And it is not nearly as difficult as you think. In most cases, our clients complete their living trust estate plan in two one hour meetings at a very reasonable fee. And our clients consistently thank us for making the process pleasant and easy.
Make 2016 the year you protect your family.
Every year we tend to get a lot of new trust administration clients in November and December. Most people know that if their parent or grandparent had a living trust, they may be able to avoid probate. However, most people don’t know what is involved in a trust administration. We’ve prepared a guide outlining the basic steps to administer a trust.
This afternoon I will watch El Dorado Musical Theater’s (EDMT’s) wonderful production of A Christmas Carol for the sixth time. Yes, my daughter is in the show. It is a fantastic performance based on the Charles Dickens story. It brings to mind what may be Dickens best novel, Bleak House, about years and years of litigation over a will.
Two of my lawyer friends are probate and trust litigators. They help family members protect their inheritance from what are at best greedy or at worst intentionally fraudulent executors or trustees.
How smoothly everything goes when an updated estate plan is in place. We do a lot of trust administrations, and by far the majority of them are done effectively without the need for court intervention and the costs and anxiety that go with litigation,
These trust administrations go smoothly because the parents named responsible people to serve as the role players in their living trust, will, durable power of attorney, advance health care directive and HIPAA, and they funded their living trust so their assets were owned by the trust and not subject to probate. And, they kept their estate planning documents up to date by reviewing them with their attorney every few years.
By the way, what goes unreported in A Christmas Carol is that after Scrooge’s change of heart following his experience with the ghost of Marley, and the ghosts of Christmas past, present and future, he worked with his estate planning attorney and executed an estate plan naming his nephew Fred as trustee and executor and leaving his fortune to Fred and the Cratchit family. And he kept his estate plan up to date until the day he died.
El Dorado Musical Theater’s (EDMT) A Christmas Carol is amazing. Don’t miss the ghost of Marley zombie dance number. We are lucky to have this Broadway quality production with our kids in our community. A must see for the whole family at the Harris Center. Only one week to go. Click here for tickets and more info.