Wills & Living Trusts

If you have a FAMILY -- you have a REASON.

Deciding what is Best for you -- Will vs. Living Trust

You have worked hard for your money and saved every dollar you could. You have an Estate. Everyone has an Estate. It's only natural that you want some control over what happens to your assets after your die.

Proper Estate Planning ensures that your assets will be administered during your lifetime in a manner best suited for you as well as providing for the efficient distribution of your assets to your loved ones upon your death. Estate Planning includes a review of your current assets, potential issues during your lifetime that may put your assets at risk, such as the need for long-term care, concerns about your spouse, blended family, children or other beneficiaries' ability to manage their affairs, asset protection and probate avoidance.

A basic Estate Plan includes a Will, Health Care Power of Attorney and Property Power of Attorney. An enhanced Estate Plan calls for a Living Trust, Health Care Power of Attorney, Property Power of Attorney and other documents depending on the needs and goals of the individual.

A Revocable Living Trust is commonly used for probate avoidance, creating trust shares for minor children or grandchildren thus avoiding the costs associated with a formal guardianship and to allow for distributions to beneficiaries at various ages or with restrictions. More sophisticated planning is required when dealing with special needs beneficiaries, credit shelter trusts and Medicaid planning.

It's important to note Estate Planning isn't just for the elderly or retired - it's for everyone.

What Is a Will?

A Will is a written document, which you sign and have witnessed, that details how your property will be distributed at the time of your death. Your Will can be changed or amended at any time during your lifetime. It also allows you to appoint a guardian for your minor children. You must designate someone to serve as an Executor to administer your estate in Probate Court. A Will does not avoid Probate.

Other considerations which may be included in a Will include the following, specifying your funeral/burial preference, especially if you are considering cremation.

While there is no legal requirement to have a Will, if a person dies without one, that person's estate will be distributed according to state law.

What Is a Living Trust?

A Living Trust is an alternative to a traditional Will. A Living Trust is a document that benefits you during your lifetime and at death. A Living Trust allows you to plan the management of your estate during your lifetime. A Living Trust directs how your assets should be divided at death. As with a Will, you must designate someone to serve as Trustee of your Living Trust upon your death or upon your resignation or incompetency.

There are two types of Living Trusts, Revocable and Irrevocable. Revocable Trusts are the most common type of trusts to avoid probate and allow maximum flexibility to the individual(s) creating the Living Trust during their lifetimes. Irrevocable trusts are commonly used in asset protection planning and are more restrictive with the individual(s) creating the Irrevocable Living Trust divesting themselves of all ownership of the assets transferred to the Irrevocable Living Trust.

If you become incapacitated, a Living Trust is written so that your Successor Trustee will have immediate access to the assets, which is especially important if a family business needs to be maintained. If you own properties in multiple states, not having a Living Trust will require your family to have a Probate in each state in which you own property.

If you want to set your children and grandchildren up for success (and not spoil them with a large inheritance or have them inherit money before they are prepared), you need to have a properly structured trust.

Unlike a Will, a Living Trust is a private document, which means it can be administered without court involvement. As a result, the expense, publicity, and inconvenience of court-supervised distribution of your estate can be avoided

If a living trust is properly written and funded you can:

  • Avoid probate on your assets
  • Plan for the possibility of your own incapacity
  • Control what happens to your property after you are gone

A Living Trust is more expensive to set up than a typical Will. To avoid Probate, your assets must be put into your Living Trust. This process is called funding your Living Trust. A Living Trust is useless unless it is funded. A Living Trust only can control those assets that have been placed into it. If your assets have not been transferred or if you die without funding the Living Trust, the Living Trust will be of no benefit as your estate and your estate will still be subject to Probate.

Other Estate Planning Considerations

What is a Power of Attorney?

A Power of Attorney is a building blocks of solid, forward-looking estate planning.

You can never know when an accident or illness will put you in the hospital. At any age, it is important to take the time and create a plan in case you are put in a position where you cannot make decisions for yourself.

If you become incapacitated, you will still have bills to pay and you may need someone to make medical decisions for you regarding your care. With a power of attorney, you can appoint a person to make financial or medical decisions on your behalf. This person does not need to be a lawyer, as the name suggests, but can be anyone over the age of 18 who you trust to make decisions for you.

There are two basic types of Power of Attorneys: Health Care Power of Attorney and Property Power of Attorney. If you do not have these documents, you are at risk of needing a Guardianship in the event you become incapacitated, temporarily or permanently.

With Health Care Power of Attorney, you designate someone to make health care decisions for you in the event you are unable to do so. With a Property Power of Attorney, you designate someone to handle or assist you with your financial matters. You can grant someone immediate access to your finances/assets or grant them authority upon your becoming incapacitated.

What is a Long Term Care Planning?

With the average annual cost of nursing home care exceeding $120,000 in 2016, it is imperative that families educate themselves as to the options available to them if they are potentially facing the need for such levels of care for themselves, their spouse or their parents. Otherwise, it is easy to spend all of the savings you worked to accumulate. Our primary focus is to help preserve assets for the benefit of those who are in need of care either in the home, assisted living or nursing home.

Despite what you may have been told or heard, there are many ways to help protect your assets and become eligible for Medicaid benefits and/or Veteran's Aid and Attendance benefits, even if you are already receiving care.

Statistics show that at least 70% of people over the age of 65 will need some level of long term care; so the time to ask about long term care planning is now. With a 5 year "look back" period applicable to the transfer of assets to non-spouses for less than market value (gifts) for Medicaid eligibility purposes, the earlier families begin the process, the more assets they will be able to protect.

Linda Bal will assist clients with the drafting of Wills and Living Trusts. The goal of our Estate Planning Practice is to protect all of your assets and ensure the distribution to your beneficiaries pursuant to your wishes, in the most effective cost effective way possible. Your Will, Living Trust, Power of Attorney or other Estate Planning Document will be unique to your specific needs. Attorney Linda Bal has dedicated her more than 25 year career to addressing client' concerns. You will appreciate her comforting personal service and attention to detail.

Note -- we are also glad to help update a will or trust.

To get help in deciding if a Will or Living Trust is right for your family, call us at 630-296-5084 or email us. Your initial consultation is free.