Many people have misconceptions about the need for, or costs of, estate planning. Some individuals think that unless you are wealthy, a will is all that is needed. But if you have children, especially young children, a trust may be a much better option to cover your needs. If you have a house, boat or other assets, it’s important to ensure they are handled according to your wishes, and in the best manner to minimize tax implications. All of these factors can greatly impact you, in the event of your incapacitation, and your family, in the event of your death. Take the quiz below to determine how much you know and check your answers below.
False. A last will and testament will not help you avoid the probate process. A will actually guarantees probate! A last will and testament only informs the probate court how you wish to have your assets distributed upon your death.
False. A power of attorney is a document that applies only while a person is living. After that person dies, the power of attorney and your authority ceases to exist. A power of attorney dies with the person. If you continue taking actions after a person passes away, you could become legally liable for actions taken.
False. A revocable trust will not give you protection from the costs of nursing home care. A slightly different trust, called an irrevocable trust, can offer such protections, but there are several factors worth considering to see if such a tool is right for you. There are certainly other reasons to consider a revocable trust, but nursing home care protection is not one of them.
False. Wealth has little to do with whether you would benefit from a trust or not. It is more important to evaluate whether the efficiencies of avoiding the probate process and avoiding potential conflict and time for your heirs justifies the creation of a trust. Additionally, trusts can protect assets for minor children, special needs children and family members who may have substance abuse issues, as well as general protection from your children’s divorce, bankruptcy and creditors.
While almost anything can be obtained online in today’s technologically advanced world, there are a few areas where this is particularly unwise. Using templated documents for your will or trust is not a one-size-fits-all approach and could actually cause more harm than good. It is wiser to discuss your particular situation with an experienced estate planning attorney to determine the best options for you and your family. The costs to set up and file a will or trust are about the same as a weekend getaway and will potentially save your family a lot of pain and frustration when faced with the grief of your death. Your family will be glad you took the time to think through these processes with the help of an advisor. That advisor will also be there to help them should any questions or issues arise.
How did you do? Is your family protected in the event of your incapacitation or unexpected death? What happens to your children if something happens to you? Do you have questions about the best approach for your situation? Want more information? Visit www.frameandframe.com to download a free guide to wills, trusts and probate.
Tara Frame is the managing partner at Frame & Frame Attorneys at Law, and the firm has been assisting members of the local community for over 65 years with life’s legal journeys. Contact Tara today if you need help with wills and trusts or probate administration services.