THE ESTATE PLANNING SOLUTION

The basis of a good estate plan is a revocable living trust that contains your special instructions for your own care and that of your loved ones. It allows you to give what you have to whom you want, the way you want, and when you want while saving tax dollars and probate costs. It is the very essence of what constitutes good estate planning.

These instructions are what distinguish our living trust documents from wills and bare-bones living trusts.

Your living trust can be changed or cancelled at any time. As maker, trustee, and primary beneficiary, you control every aspect of how your property will be used. You also appoint the other trustees and you maintain control.

GOOD ESTATE PLANNING MEETS YOUR GOALS

A properly prepared plan meets your unique goals. It allows you to plan for your own disability and direct the distribution of your property. It saves tax dollars, professional fees and court costs. And, most importantly, it keeps you in control of your own affairs.

WHAT IS GOOD ESTATE PLANNING?

Good estate planning allows you to plan for yourself and your loved ones without giving up control of your affairs. Your estate plan should allow you to plan for the possibility of your own disability. It should give what you own to whom you want to receive it, the way you want them to receive it, and when you want them to receive it.

Your estate plan should save every tax dollar, professional fee, and court cost that are legally possible to save.

THE PITFALL OF WILLS

• Wills guarantee probate. Probate generates higher executor and attorney fees as well as court costs; it causes delays before your loved ones can receive their inheritance.
• Wills are fully public. They are open to inspection by anyone who wants to know about your debts and your beneficiaries or their inheritances.
• Wills offer no planning or direction for you or your family in the event of your disability.
• Wills are easily challenged by unhappy relatives.
• Wills often don't control your life insurance proceeds, retirement benefits, or jointly-owned property.
• Wills are often bare-bones form documents written in hard-to-understand language. They don't capture your hopes, fears, dreams, values, and ambitions.
• Wills may not be effective when you move to or own property in another state.

THE PITFALLS OF JOINTLY-OWNED PROPERTY

• Your joint tenancy property can pass to unintended heirs.
• Joint tenancy does not avoid probate. It only delays it.
• There may be unintended gift and estate taxes if joint tenancy is used between non-spouses or with children.
• Joint tenancy makes no provision for estate tax planning.
• You give up ultimate control.

THE PITFALLS OF PLANNING WITH A BENEFICIARY DESIGNATION

Designating who will receive your life insurance and pension benefits

• Beneficiary designation often means losing control of a major part of your estate. It does not enable you to leave instructions or provide guidance to your loved ones.
• The wrong beneficiary may be named.
• It won't protect your spouse and children from creditors or unscrupulous people.
• Equal distributions from a beneficiary designation can cause results that won't meet your family's unique needs.
• Beneficiary designations make no provision for federal tax planning.

THE PITFALLS OF BARE-BONES LIVING TRUSTS

• Many trusts are sterile legal forms that do not contain instructions for loved ones. They only accomplish limited objectives.
• If not fully funded, living trusts do not avoid probate.

WHAT CAN GOOD ESTATE PLANNING DO FOR YOU?

• Provide instruction for your care and that of your loved ones in the event of your disability.
• Be effective if you move to or own property in another state.
• Avoid probate and its associated legal costs.
• Keep your affairs private and confidential.
• Allow you to leave explicit instructions for the care of your loved ones.
• Create protective trusts for your spouse, young children, disadvantaged children, adult children and grandchildren.
• Provide federal estate tax planning or governmental assistance planning.

© 2005, Legacy Lawyers.
Send questions or comments to
Raleigh bill.alexander@legacylawyersnc.com
Wilmington john.peck@legacylawyersnc.com