Start Planning Now…

                                       To Protect Your Family

By: Crotty & Bartlett, P.A.

An estate plan for single individuals is somewhat different than for young couples with children or blended families or families with adult children or life partners. For example, a couple with small children may wish to focus on saving for their children's college educations; thus, gifting would not likely be apart of their estate plan. In contrast, older estate planners may wish to include gifting in their estate plans because their adult children are financially stable. In either case, a trust is a powerful tool to achieving their estate planning goals.

Last Will and Testament

It is important to execute a last will and testament, so that when you pass, your assets will pass to the individuals you designate. It will prevent strain among family members as to who is entitled to certain assets such as family jewelry or your home. In addition, you may want to consider a pour-over will. Under a pour-over will, all of your assets are placed into a either an existing trust or a testamentary trust created under your will. 

Trusts

Trusts have many attractive features such as avoiding the costs, hassle, publicity, and time of probate. It can also minimize estate taxes and can protect your spouse and your children against creditors after you pass.

Trusts can be either irrevocable or revocable. In a revocable trust, you maintain control over your assets; however, the assets within the trust are still subject to federal estate tax when you pass. In contrast, under an irrevocable trust, you no longer have control over your assets. Since you do not have control, the assets are not subject to federal estate tax when you pass. It is important to note that your revocable trust becomes irrevocable at your death.

A living trust is another useful tool to protect spouse, your children, or other beneficiaries of the trust after you are gone. It can provide safe management of the assets to provide for the beneficiaries’ education, health care, reasonable comfort and support.

Another type of trust is an irrevocable life insurance trust (ILIT). An ILIT holds an insurance policy that you have purchased and placed into the trust. It is important that the value of the insurance policy is enough to create sufficient income for the surviving beneficiaries to live off of comfortably. The money used to pay for the premiums of the insurance policy are considered to be outside of your estate; thus, the payments of the premiums are not subject to federal estate tax. One other benefit of the ILIT is that it may protect against creditor’s claims.

Estate Planning for Individuals and Young Couples and Life Partners

Although you may not have children, it is still important to have an estate plan because your assets must pass to someone. Without an estate plan, your assets will pass by intestacy to your heirs. You may be wondering who those heirs are. They could be your parents, grandparents, siblings, nieces, nephews or cousins or other relatives. Without an estate plan, your assets may go to individuals to whom you may not necessarily wish to pass your assets. Even worse, your family may have to wait months and even years for the probate of your assets and some of your assets may be sold to pay federal estate tax.

Begin by Taking the First Step

The first step is to execute a will, healthcare documents, and a durable power of attorney. The next step is to consider creating a living trust. We understand that it’s not easy to think about these things and our goal is to help you achieve all of your estate planning goals and to secure your legacy. To begin creating your estate plan, please give us a call. We look forward to helping you and your family.