At the Potter Law Firm, we field questions about estate planning and elder law every day. Many of them are highly individualized and related to specific client circumstances, but many others are more general in nature and repeated by other clients at different times. If you’ve ever wondered about any of these frequently asked questions, then the answers here can provide valuable insight about many important estate planning concerns.
“Why do I need a will?”
It’s surprising how many people wonder whether they need a will. Some seem to think that their assets will get distributed to the right people without any problem, since they trust that a relative will just pass everything on. Unfortunately, that’s not how things work. There is a formal process for settling most estates, and not having a will doesn’t negate that process.
Since the probate process is controlling in most cases, and the absence of a Last Will leaves the distribution of your assets to be managed in accordance with the state’s intestate succession laws, it is sensible to execute a proper will to ensure that your affairs are settled according to your wishes. You could leave it up to chance, but why take the risk that one of your favorite heirs might somehow end up with nothing?
“Do I need an attorney?”
You don’t technically need an attorney to handle your will or other estate planning. Then again, you don’t technically need a plumber to install new pipes throughout your home. The real question is whether you know enough about plumbing – or in this case, estate planning – to handle the job on your own. The money you try to save up front could be but a fraction of what you lose if you make costly mistakes by handling everything without a professional.
“Which assets need to be probated?”
Probate is an important process, but it doesn’t always involve all the different assets in the estate. As a rule, probate is needed only for those assets that have no other way of being legally transferred to their new owners. That generally includes assets that are titled in your own name, and that lack specific instructions for post-death transfer of ownership – things like a bank account in your sole name, a home where you’re the only person named on the deed, or a car in your name.
“Can my estate avoid probate?”
Yes, your estate can avoid probate. Of course, you’ll have to take some action to arrange your assets in a way that ensures that they can be automatically transferred to your beneficiaries when you die. For example, you can:
- Use joint tenancy to enable property to pass to surviving tenants when one of you pass away
- Use payable on death designations for bank and checking accounts, listing a beneficiary who’ll receive the accounts when you die
- Use trusts to handle asset distributions
“Don’t you need to be rich to use a trust?”
You do need to have some assets that you can use to fund the trust, since trusts cannot exist without them, but that doesn’t mean that you need to be super-wealthy. While trusts were once the province of those elite families, today they are used by families of virtually every income levels. If you think a trust might benefit you, don’t hesitate to discuss it with your attorney. And be sure to consider the different types of trusts that might be able to help you manage many complex estate planning challenges.
“How much can I save in taxes with my revocable will?”
It’s rather common to hear people talking about saving money on taxes by using revocable trusts. Often, the confusion starts when people talk about how living trusts can reduce tax liability. And since revocable and irrevocable trusts are both living trusts – they go into effect while the grantor is still alive – some people mistakenly assume that they can all provide tax benefits. To be clear, irrevocable trusts can often provide the estate with tax benefits. Revocable trusts cannot, since the grantor’s ability to revoke the trust and reclaim the assets means that they are still considered part of his estate for tax and creditor collection purposes.
“Why would I need incapacity planning?”
You may never have to worry about becoming incapacitated and losing your ability to manage your own affairs, but there are no guarantees where health is concerned. Incapacity planning uses powers of attorney and advance directives to ensure that you have someone in place to make your financial and medical decisions for you if you ever lose the capacity to do so yourself. With that plan, you can spare your family the strife and grief that a court guardianship battle might cause, and save your estate the expense that such a guardianship might create.
“Do I need Medicaid planning?”
There’s nothing that says that you must use Medicaid planning to ensure that you can qualify for long-term care benefits to pay for nursing home costs later in life. After all, you could just ignore the problem and hope that you never need that care. However, given estimates that most of us will need to spend at least some time in a long-term care facility in our latter years, it makes sense to have a plan to properly fund the high cost of nursing home care – especially when you consider that those costs are expected to continue to rise in the future.
At the Potter Law Firm, we can help you navigate these and other important questions that you might have about the estate planning and elder law issues that directly impact your life. We can work with you to evaluate your current circumstances and figure out which tools and strategies will best meet your unique planning needs. If you’d like more information related to any of these frequently asked questions about estate planning or would like to consult with us about your legacy concerns and elder law need, contact us online or call us today at (704) 944-3245.