Inheritance Planning: See the Entire Picture

If you were going on a trip somewhere and someone was going to be watching your home, you would make sure that they were prepared for everything that could occur. You wouldn’t simply give them the keys and hope that the rest falls into place. This is the mentality that you should apply to your inheritance planning efforts as well.

It is important to ask yourself how your wishes will come to fruition after you are gone. Clearly, you state them in a legally binding document like a last will or a trust, but what happens after you pass away? Who will take care of all the tasks that must be completed to administer the estate properly?

Estate Administration and the Last Will

The last will is the most commonly used vehicle of asset transfer in the field of inheritance planning. You would name an executor in the document if you use a last will as the centerpiece of your estate plan. This is the individual who would handle the estate administration chores.

One of the tasks of the executor would be to identify and inventory the assets that comprise the estate. This can be rather complicated and time-consuming if the executor does not have any guidance.

To account for this, you can include a letter of final instruction to give the estate administrator the information that is needed to access the resources and prepare them for distribution.

Any adult who is of sound mind that is willing to assume the role can legally serve as an estate executor, but as you can see, it is not a purely ceremonial role. There are real-world, hands-on business, legal, and financial matters that must be addressed before the estate can be distributed to the heirs.

This is something to think long and hard about when you are choosing your executor. The individual must be trustworthy with no conflicts of interest, and you have to consider the level of financial acumen possessed by the individual you are considering.

To make things simpler for the administrator, you could instruct the executor and anyone else who will be involved to contact our firm when the wheels must be set into motion. When we are involved in the creation of an estate plan, we are uniquely positioned to assist during the estate of administration process.

Trust Administration

Though there are more complicated types of trusts that we will look at in future blog posts, the trust that is best for most people is the revocable living trust. It can be a good alternative to a last will for a number of reasons, and the streamlined administration aspects are near the top of the list.

The idea is to make the trust the owner of the property that is going to comprise your estate. In this manner, all of the resources are easily identifiable, and this allows for efficient administration.

To account for property that you may never have conveyed into the trust while you were living, you can add a pour over will. This type of will would allow this property to be “poured over” into the revocable living trust after you die.

You could name someone you know to act as the trustee, but it is also possible to use a professional fiduciary such as a trust company or the trust department of a bank. When you use a corporate trustee, you can be certain that the trust will be administered in accordance with professional standards.

Once again, if you engage our firm to help you create the trust, you can arrange for us to get involved during the trust administration stage if you choose to do so. We can answer any questions that may arise and advise the trustee with regard to the proper steps that must be taken from a legal perspective.

Attend a Free Estate Planning Seminar!

We are holding a number of inheritance planning seminars over the coming weeks, and you can learn a great deal if you attend the session that fits into your schedule. There is no charge at all, but advance registration is highly recommended. To get all the details, visit our seminar schedule page and follow the instructions to register for the date that works for you.