Estate Planning
Those considering starting the estate planning process usually have one or more questions:
- Why do I need to prepare a will or trust at all?
- Do I need a living trust?
- How can I protect my young children?
- How can I protect my special needs relative?
- How do we arrange our affairs to adequately protect all sides of our blended family?
- How can I keep peace in the family after I’m gone?
Wills or trusts are used to make death-time distribution intentions clear. They are also used to express wishes about guardianship of minor children. A person who dies without a will is said to be intestate. Those who die intestate have an estate plan imposed on them by the state in which they lived at the time of their death.
The main reason people choose to do living trusts is to avoid probate. If a person creates a living trust prior to death, and if all the person’s assets are transferred to the trust, probate will likely be avoided at the person’s death.
Those who are creating an estate plan are usually interested in making contingency plans for their young children. The contingency plan should cover the logistics and financial aspects of caring for the children. The logistical part of the plan hinges on making the decision regarding who will raise the children—that is, act as guardian—in the event no parent is available to do the job? The financial part of the plan may be to create a trust for children at the time of the death of one or both parents.
A special needs trust is designed to ensure that a disabled child or other beneficiary can enjoy the use of trust property, which is intended to be held for their benefit. The trustee of the trust provides management of the trust assets, which the beneficiary may be incapable of. The special needs trust is also usually intended to help the beneficiary avoid losing access to needs-based government benefits.
When thinking about estate planning issues in blended families, the partners must consider and answer a variety of questions: Should the surviving spouse get access to both spouses’ assets at first death? If yes, should spouse’s access be restricted or unrestricted? When and to whom should the ultimate distribution be made? How should family considerations be matched with estate tax considerations? Which of the children should be taken care of? When should the children receive an inheritance? How should distributions for the benefit of children ultimately be made?
The answers to these questions will help an estate planning attorney make proper drafting choices when putting together the plan.
Estate planning professionals have plenty of ideas for dealing with the possibility of family strife. Creating a written estate plan and keeping it current is the best way to plan to avoid issues after death.