Unfortunately, most people do not have estate plans, and many who do have taken minimal precautions. The same folks say that they would do anything for their families, but somehow they have a blind spot when it comes to this subject.
This is a very important responsibility, and it should be taken seriously. It doesn’t take an enormous amount of time, effort, or money to work with an estate planning lawyer to develop a solid plan.
In addition to the use of a will or trust to facilitate asset transfers, you should address the tasks that must be completed after you are gone.
Administration of a Simple Will
If you create a will, you would name an executor to act as the administrator. You should be very careful when you are designating an executor because there are procedural steps the executor must take when the estate is being probated by the court.
We are not going to get into the specific duties of an executor here, but we will cover them in a future post.
The executor will assume some degree of personal liability, and depending on the size and scope of the estate, it can be time-consuming. You should make sure that the person that you want to designate is willing to assume the role.
Consider longevity as well; you can designate an alternate executor to step into the position if the first choice is not available at the time of your passing.
Many executors are also heirs to the estate, but these are some tricky waters to navigate in some instances. Sometimes it is not a problem at all, but you should consider potential conflicts of interest when you are choosing an executor.
Living Trust Trustee
Revocable living trusts are very widely used because they provide benefits beyond those of a simple will. If you establish a living trust, you would act as the trustee while you are living so you would never relinquish control of the assets that are held by the trust.
All the assets would be listed on a schedule so the asset identification and inventory process is streamlined. The asset distributions would not be subject to probate, and this is a significant advantage.
Unless you include a testamentary trust, the heirs receive direct lump sum inheritances when a will is used. This can be problematic if you are going to be leaving resources to someone who is not ready to handle a significant inheritance without any guardrails.
When a living trust has been established, it would become irrevocable after your passing; and the assets can be protected from the beneficiary’s creditors. You could leave instructions for the trustee with regard to the nature the distributions.
The exact arrangement would be up to you, but many people will instruct the trustee to distribute the annual earnings broken up into monthly increments. Some of the principal could be added to reach a certain dollar figure each month, but once again, you have the freedom to set the terms.
Because the trust can remain intact as an income producing entity, there is another dimension to consider when choosing a trustee. You can select someone that you know personally, but you could alternately use a professional fiduciary with investment management experience.
Letter of Last Instruction
Your estate administrator will need access to certain materials, like the location of relevant documents, property, storage units, etc. Since most of us conduct business online, login data will be part of this equation, and this can extend to social media accounts and websites.
You can pass along all relevant information in a letter of last instruction. In addition to the above, it could include the names and contact information of people who should be informed about your passing. Instructions about your desired final arrangements can also be added.
Schedule a Consultation Today!
We are here to help if you are ready to work with an attorney to put a custom crafted plan in place. You can schedule an appointment at our office in Charlotte, North Carolina or Huntersville, North Carolina if you call us at 704-944-3245.
The number in Ashland, Kentucky is 606-324-5516, and the number in Florence, Kentucky is 859-372-6655. We also have a contact form you can fill out if you would rather send us a message.
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