Pa u l M. W i l l i a m s

Attorney At Law, PLLC

Estate Planning

Common Estate Planning Questions

What is Estate Planning?

Estate planning is a process whereby a person begins to put there affairs in order so that their loved ones are protected in the event of their death or incapacity by implementing legal documents, such as last wills and testaments, power of attorney’s, revocable or irrevocable trusts and other  documents as need.  Each document or plan is unique and provides different strategies for managing your affair upon your death or incapacity. The implementation of any document or plan is dependent on each person needs and concerns, and should be carefully evaluated before executing, as there may be implications in choosing one plan over another.

What is an Estate?

It’s everything you have acquired over your lifetime, including your personal effects, home, bank accounts, retirement investments, stocks, bonds and life insurance proceeds.

If I jointly own my assets with my children, will my assets avoid probate court?

Yes, assets that are jointly titled should automatically pass to the co-owner by operation of law upon your death.  However, adding children or other individuals to the title of you assets may cause greater concerns then probate. Joint ownership increases your liability exposure, especially if the co-owner is involved in a lawsuit, divorce, or bankruptcy. Furthermore, joint ownership may cause significant capital gain tax issues upon the liquidation of the jointly owned asset, which may have been avoided using different strategies.

If I have a revocable trust do I need a last will and testament?

Yes, a trust only controls the distribution of assets that are funded into the trust, by retitling yours assets, nominating the trust as a beneficiary, assignment or by other means. Assets that not properly funded into the trust will need to be probated.  The last will and testament would then be the instrument utilized to determine the disposition of the assets going through probate. Even if the trust is properly funded, probate court has the authority to appoint guardians for minor children and the last will and testament is commonly used to direct the court in nominating the guardians.

If I have a last will and testament, do I need powers of attorney's?

Yes, a last will and testament is only utilized upon death, and is used to determine the heirs of the estate, the personal representative of the estate and the potential guardianship of minor children.  In order to ensure the avoidance of probate upon your incapacitation, you should implement a Durable Power of Attorney and Medical Power Attorney.  These documents will allow the person you nominated to manage your financial affairs and make medical decisions for you.  Without these documents in place, your loved ones will have to turn to the probate court and be appointed as your conservator and/or guardian in order to manage your affairs.

Estate Planning Documents

Last Will and Testament:
The last will and testament is the traditional approach to estate planning and becomes effective upon the death of the testator or testatrix (creator of the last will and testament). This document can be an effective tool to transfer your estate to your loved ones and allows you to create distribution strategies for your beneficiaries depending on their needs or abilities. It is also the instrument utilized to nominate the guardians of your minor children.
Essential Facts:

  • The last will and testament must be filed with the probate court upon your death.
  • Probate court is a public process or forum and documents filed with court become a matter of public record.
  • The personal representative does not automatically have the authority to distribute the estate and must obtain court approval.
  • Administration fees and court cost can be as much as 10 to 15 percent of probate estate.

Revocable Living Trust:
A living trust is created during the lifetime of the grantor(s) (creator of the trust), and is designed to continue after his or her death. The trustee (a person that the grantor(s) appoints to manage the trust assets) of your trust is able to immediately take charge of the assets owned by the trust upon the grantor(s) incapacity or death without the courts involvement. During the grantor's lifetime he or she may revoke or modify the terms of the trust agreement. However, upon the death of the Grantor(s) the trust becomes irrevocable and can't be changed. Upon the death of the grantor(s), the successor trustee manages the assets for the contingent beneficiaries pursuant to the plan of distribution created for each beneficiary. 
Essential Facts:

  • Maximizes Privacy
  • Avoids Probate Court
  • Minimizes Time and Cost during the Administration Process.
  • Controls Plan of Distribution.
  • Allows more Flexibility in planning for Minor Children and Second Marriages.
  • Requires retitling of  assets

Power of Attorneys:
These are probably one of the most important documents to be implemented, yet most people are more concerned about the how much their heirs will inherit upon their death. Without taking into consideration the possibility of becoming incapacitated and the need for someone to take care of your finances and make health care decisions for you, the thought of securing your family or loved one could be nothing more than wishful thinking.  Powers of attorneys allow you to appoint an individual to be your Attorney-in-Fact and Patient Advocate.  The individual appointed will be empowered to make financial and heath care decisions for you, based upon the directives you have given.
Essential Facts:

  • Avoids Probate Court
  • Maintains Privacy.
  • Allows you to appoint the individuals that you want to be in control of your finances and make medical decisions for your.
  • Minimizes arguments between loved ones.
  • Allows you to make advance medical directives regarding life sustaining treatment