Last Wills and Testaments
National polling indicates that most Americans do not have a last will and testament, but wills are vital to ensuring that, after your death, your affairs are handled as efficiently and smoothly as possible. Having a will ensures that your property is distributed according to your wishes and enables you to designate who you would like to handle your affairs after death, and who you would like to serve as guardians of any minor children who survive you. The advantages of having a last will and testament are myriad, but perhaps the greatest advantage is providing your loved ones with clarity as to how your estate should be administered when you are gone.
A Revocable Trust may be used as substitute for a Last Will and Testament. The grantor of a Revocable Trust may serve as the sole trustee and as the primary beneficiary, and may amend or revoke the trust at any time. Upon the grantor's death, all assets held in the Revocable Trust pass to the secondary beneficiaries automatically pursuant to the terms of the trust. Therefore, if, at the time of his or her death, the grantor has transferred all of his or her assets to a Revocable Trust, there may be no need to probate the grantor's will or administer the grantor's estate at all because, technically, the grantor died without any assets. Bypassing the probate/administration process is an attractive feature for many individuals, as the courts have become overwhelmed with matters and, as a result, the process now takes many weeks, if not months. Furthermore, because a Revocable Trust is a private document, the grantor need not share it with anyone -- only the successor trustee and secondary beneficiaries will be entitled to a copy of the Revocable Trust upon the grantor's death. This reduces the possibility that disinherited individuals will be able to contest the grantor's testamentary wishes after his or her death.
Business Succession Planning
All businesses need some kind of succession plan to ensure both that the business can continue on seamlessly at the death of one of the owners and that the deceased owner's family gets the benefit of their fair share in the business. Whether that plan involves the next generation, or a lump sum payout, it is important to plan in advance so that there is no confusion as to how the business will continue on, or wind up, as the case may be.
Asset Protection Planning
For individuals who have a high liability exposure, asset protection planning is a vital component of wealth preservation if it is properly put into place before liability arises. Asset protection planning involves creating an ownership structure, through transfers to trusts, for example, that moves an individual's assets outside of the reach of his/her creditors while still affording him/her a beneficial interest therein.
Irrevocable Trusts are trusts which may not be amended or revoked by the grantor, although the grantor may be a beneficiary. Irrevocable Trusts are often used as an estate tax planning measure, as assets transferred to a properly drafted Irrevocable Trust may not be included in one's gross estate for estate tax purposes. Depending on the particulars of the governing instrument, Irrevocable Trusts may also provide creditor protection and be useful in Medicaid planning.
Insurance Trusts are irrevocable trusts specifically designed to prevent insurance proceeds from being included in one's gross estate at death for estate tax and other purposes. Insurance Trusts are also effective for ensuring that insurance proceeds will be held in trust for beneficiaries, as opposed to being distributed to the beneficiaries outright, and can provide beneficiaries with many advantages, including creditor protection.
Health Care Proxies
A Health Care Proxy is a document that designates an agent to make health care decisions for you in the event that you are not able to make health care decisions for yourself. For example, if you were to become so incapacitated that your doctor determined that you could not make treatment decisions for yourself, your health care agent would be authorized to make such treatment decisions on your behalf. It is important to designate a health care agent to ensure that health care decisions can be made for you quickly and seamlessly.
A Living Will sets forth your end-of-life medical wishes and provides health care professionals with instructions as to the kind of medical interventions you are comfortable with.
Powers of Attorney
A Power of Attorney is a document that authorizes another person (your "agent") to act on your behalf. It can take effect upon signing or upon incapacity, and specifies an array of powers that your agent may exercise, including paying bills, entering into contracts, buying or selling real estate and making gifts. Powers of Attorney are useful in the event that you become incapacitated and need someone to act on your behalf with regard to your finances.