What Are The Key Components Of An Estate Plan?
One of the key considerations in the creation of an estate plan is whether a will-based plan or a trust-based plan better suits the client’s goals and amount of assets. For people who own multiple properties, own a business, have special needs family members, have a blended family, or have a taxable estate, a trust is strongly recommended. For other people, a will-based plan including powers of attorney and the names of beneficiaries will suffice.
What Are Some Different Types Of Estate Plans That May Be Suited For Different Age Groups?
A good estate planning attorney will take into account the specific circumstances that apply to the client, including their wishes and the type of assets they own. If someone has a special needs child, it will be very important to ensure that the assets they leave to that child do not interfere with that child’s eligibility for government assistance.
If a husband and wife each have children from different relationships, then it will be important to plan in a way that lowers the possibility of the surviving stepparent having to engage in a dispute with the children of the deceased spouse. Without planning, disputes and/or litigation are almost guaranteed to occur.
A young couple with no children may or may not want to create a trust. A will-based plan with beneficiary designations is less expensive on the front end, and puts the cost on the back end for the family to absorb down the road. In my experience, most people who do not have children are primarily concerned about providing for each other.
When working with someone who is on their deathbed, the primary consideration is whether they are competent. In some cases, more harm than good can be done by trying to plan on death, especially if there are questions about capacity. In these situations, my goal is to obtain a medical opinion about the individual’s decision-making ability, and then determine what type of planning can be accomplished.
What Are Some Common Trusts That People Should Be Aware Of?
A revocable trust is also referred to as a living trust and can be amended, revoked, or changed during one’s lifetime. This type of trust is the centerpiece of many estate plans. After the death of the person who created a revocable trust, the trust becomes irrevocable. A testamentary trust is usually written into a will and only goes into effect upon death. Irrevocable trusts are usually created with a specific planning purpose in mind, such as tax planning, asset protection planning, or credit shelter planning.
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