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The Potter Law Firm

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Home » Resources » Frequently asked questions » Legacy Wealth Planning FAQ’s

Legacy Wealth Planning FAQ’s

    • What is Legacy Wealth Planning?

    • Legacy Wealth Planning is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy. Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property. Your legacy incorporates important decisions ensuring your family core values, responsible behaviors and community involvement are passed on to future generations. Keep in mind, your legacy also includes personal effects, such as family heirlooms, stories, and accumulated wisdom and life lessons of your family.

    • What is “traditional” estate planning?

    • Traditional estate planning (Wills and Trusts) focuses on the accumulation, the preservation, and the distribution of only your financial assets and worldly possessions. It protects material wealth from probate and minimizes taxes.

    • Why do I need an estate plan?

    • Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.

    • What is the difference between “traditional” estate planning and Legacy Wealth Planning?

    • Traditional estate planning is focused on financial assets and is concerned with avoiding probate and estate taxes. On the other hand, Legacy Wealth Planning is concerned with financial and non-financial assets of a family and creating a family’s personal legacy plan. Legacy Wealth Planning addresses how to capture and transfer family traditions and values, as well as protecting financial wealth for current and future generations.

    • If I don’t create an estate plan, won’t the government provide one for me?

    • YES. But your family may not like it. The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate. Documents must be filed and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property–and it all takes place in the public’s view. If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex governmental process that can become a nightmare. Then there is the matter of the federal government’s death taxes. There is much you can do in planning your estate that will reduce and even eliminate death taxes, but you don’t suppose the government’s estate plan is designed to save your estate from taxes, do you? While some estate planners favor Wills and others prefer a Family Wealth Trust as the Estate Plan of Choice, all estate planners agree that dying without an estate plan should be avoided at all costs.

    • What is a Family Wealth Trust?

    • A Family Wealth Trust is the main component of a Legacy Wealth Plan and covers important issues other than avoiding probate.

    • What’s the difference between having a Will and a Living Trust?

    • A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove” the Will. Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a will to prey on survivors. A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Family Wealth Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.

    • How does a Family Wealth Trust differ from a Revocable Living Trust?

    • Most Revocable Living Trusts are primarily concerned with avoiding probate and estate taxes. A Family Wealth Trust offers lifetime benefits, and protects wealth for current and future generations.

    • The possibility of a disabling injury or illness scares me. What would happen if I were mentally disabled and had no estate plan or just a Will?

    • Unfortunately, you may be subject to “living probate,” also known as a conservatorship or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of your assets and personal affairs. These “court-appointed agents” must file a strict accounting of your finances with the court. The process is often expensive, time-consuming and humiliating.

    • Why should I have a Family Wealth Trust?

    • Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:

      1. Provides for the immediate transfer or trust management and distribution in the future of assets after death;
      2. Allows for a smooth transition of management upon incapacity or death;
      3. Avoids the expense and hassle of probate proceedings;
      4. Minimizes estate taxes and defers payment of estate taxes for married couples;
      5. Allows for continued control over assets after death or incapacity;
      6. Provides security to you and your loved ones;
      7. Protects your children’s inheritance from their own potential divorce;
      8. Safeguards your estate for your kids if your surviving spouse remarries;
      9. Offers flexibility.

    • If I set up a Family Wealth Trust, can I be my own trustee?

    • YES. In fact, most people who create a Family Wealth Trust act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee.

    • Will a Family Wealth Trust avoid income taxes?

    • NO. The purpose of creating a Family Wealth Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Family Wealth Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

    • Can I transfer real estate into a Family Wealth Trust?

    • YES. In fact, usually all real estate should be transferred into your Family Wealth Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Family Wealth Trust, there is no probate anywhere.

    • Is the Family Wealth Trust some kind of loophole the government will eventually close down?

    • NO. The Family Wealth Trust has been authorized by the law for centuries. The government really has no interest in making you or your family suffer a probate that will only further clog up the legal system. A Family Wealth Trust avoids probate so that your estate is settled exactly according to your wishes.

    • How do I know if I have a “bare bones” living trust?

    • Very few estate planning attorneys offer Legacy Wealth Planning. A “bare bones” living trust covers probate avoidance and usually ignores important issues to protect you, your spouse (if married) and your children. Bring your existing trust to your free one-hour consultation and we can review it for you.

    • If I have a “bare bones” living trust should I go back to the attorney who drafted the trust?

    • You can certainly go back to the attorney you worked with before, however, few attorneys offer Legacy Wealth Planning. If you want Legacy Wealth Planning, contact a member of the American Academy of Estate Planning Attorneys.

    • Is a Family Wealth Trust only for the rich?

    • No. A Family Wealth Trust can help anyone who wants to protect his or her family from unnecessary probate fees, attorney’s fees, court costs and federal estate taxes. In fact, the Family Wealth Trust offers substantial protection for your family, regardless of your total estate. In addition to savings at death, especially if your estate is over $100,000, the Family Wealth Trust also provides savings and peace of mind during life, because it avoids the expense and emotional nightmare of an incapacity or “living probate” proceeding. Also, a Family Wealth Trust protects spouses in the event of remarriage after one spouse dies and affords greater protection for children.

    • Can any attorney create a Family Wealth Trust?

    • YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Members of the American Academy of Estate Planning Attorneys receive continuing legal education on the latest changes in any law affecting estate planning, allowing them to stay on top of the latest laws and techniques to help you meet your needs.

    • What steps can I take to preserve my legacy?

    • The best approach is to meet with an attorney who understands the Legacy Wealth Planning process. This will ensure you address the financial and non-financial assets of your family. The right attorney will help you, first, set up a Family Wealth Trust to preserve your financial legacy. Then, you will be educated about completing the My Legacy workbook, to share in your own words about your life story, family history, memories, and life lessons. And finally, writing a Legacy Planning Letter to distribute your cherished possessions with sentimental value.


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There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
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Testimonials

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

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