Estate Planning Intro and General Goals

ESTATE PLANNING
Estate planning is a generic term that encompasses planning for your own elderly years including granting a Power of Attorney to someone to handle financial affairs, preparing a health declaration so your wishes as to medical treatment are respected and possibly setting up a trust or having a guardianship set up for you. Estate planning is also a term applied to the creation of a Will or Trust or some other method to transfer your property to your heirs. This may as simple as holding property in joint tenancy or under a "pay on death" designation, or as complex as use of multiple Wills and Trusts to insure that you pay the least amount of income and estate tax upon your death. It may include current gifts to your heirs or may include a limited family partnership or other method to transfer the family business to the next generation while minimizing estate tax.

This site is set up in outline form. You can click on any of the issues or subjects in the outline and you will move to that particular section. You can use the back icon in the upper left hand corner of your web browser to move back to the outline when you're finished, or you can continue reading on related issues. We at Prindle, Maland, Sellner hope that this information is helpful to you. We would be happy to assist you in preparing an estate plan that meets all of your needs by helping you weigh which of these estate planning methods is right for you. Please contact us by e-mail at sellner@montelaw.com, or by telephone at (320) 269-6491.


  • GENERAL GOALS AND ISSUES TO CONSIDER WHILE DOING ESTATE PLANNING

  • PLANNING FOR YOUR ELDER YEARS
               Power of Attorney
- Durable Power of Attorney
- Circumstance Power of Attorney

 Health Care Declaration

- Living Will
- Power of Attorney for Health Care

Use of a Living or Revocable Trust in Managing Your Assets

  •  PLANNING TO TRANSFER YOUR PROPERTY UPON DEATH
  •  EXPLANATION OF PROBATE IF I HAVE A WILL, DO I AVOID PROBATE?
  •  DYING INTESTATE - WHAT HAPPENS IF I DON'T HAVE A WILL?
  •  HOW DO I AVOID PROBATE AND IS IT A GOOD IDEA?
- Giving it all away.
- Transferring assets by title or beneficiary provision.
- Living or Revocable Trusts
- Last Wills and Testaments
- Simple Will
- By-pass or Credit Shelter Trust Will (A-B Trust Will)

  • TYPES OF TRUSTS

General Nature of Trusts - Definition

Revocable or Living Trusts

- Explanation
- Who are Revocable Trust Appropriate For
- What Happens When My Spouse Dies
- No Income Tax Savings
- Disadvantages
 
 The Life Insurance Trust Otherwise Called a Crummy Trust
- Why Should I Put My Insurance In A Trust?
- Can't I Just Have My Children Own The Insurance Policy And Avoid Taxation?
  • HOW TO AVOID OR REDUCE ESTATE TAX
  - By Pass A Credit Shelter Trust Will (A B Trust Will)
  - Crummy Trust
  - Limited Family Partnership

GENERAL GOALS AND ISSUES TO CONSIDER
 
WHILE DOING ESTATE PLANNING

Knowing the technical terms of estate planning and about the various types of strategy using wills and trusts and irrevocable life insurance trusts is a good idea. However, you should not lose sight of the primary purpose of all this planning. Many people have some general goals that tend to be assumed when they're doing estate planning. However, you should review your own goals and purposes for planning and spell them out for yourself, perhaps, even writing them down. Most people that we see would support the following goals in some manner. However, people's feelings towards them vary in intensity. Below I list several general goals and general issues that have to be considered during the estate planning process. If you think about these, and talk to your spouse concerning them, it will save considerable time, and money, for you during the estate planning process:

1. Protect the Spouse. Most wills and trusts assume that the basic goal of the estate plan is to protect the spouse first. The plan normally insures that the spouse can utilize income and even get at assets placed in trust, usually through an independent trustee, if additional funds are needed.

2. Can the Children Handle the Money. Most plans attempt to protect the children both from themselves and from outside creditors. It is also a good idea to provide for some flexibility in the distribution of funds to the children. The plan should avoid distributing assets to a child who is not ready to take on the financial responsibility of large amounts of money. It should also provide that money not be distributed if it would be used for something that's bad for the child such as drugs or alcohol. This type of restriction can get much more specific in some cases to exclude different types of religious groups (cults) that the parents disapprove of, or other restrictions. Distribution of funds can be conditioned upon the accomplishing of a particular goal, for example, finishing college or graduate school, staying employed, etc.

3. Adoption. You should consider whether adopted children are to be treated in the same way as natural children.

This issue also applies to grandchildren. You need to discuss who you wish to choose as a manager for your estate or trust. This person is called a personal representative for the estate during the probate process and a trustee for the trust during the period that your assets are held in trust for your beneficiaries.

4. Guardian, Personal Representative and Trustee. You need to choose a guardian for your minor children. You need to determine how much money should go to the guardian for the care of your minor children. Sometimes a clause is used allowing the guardian to utilize assets from the children's trust to add an addition to their own home in order to house your children. Often the trust is repaid whenever the guardian sells the house. In this way, the space is available for the raising of your children, and the guardian does not have to take a financial hit to repay the trust once the children go off to college.

5. Estate Tax. Often a primary goal of people in an estate planning process is to eliminate or at least reduce the estate tax paid. This requires complex planning. It often involves a number of trusts, gifts, and sometimes a Limited Family Partnership.

6. Keep it Simple. Another goal that should be kept in mind is that the estate plan should be made as easy and simple as possible. This is easier said, than done. In many cases, especially when estate tax considerations are a primary goal, this seems to be an impossible goal to meet. However, whoever does your estate planning should be able to explain in simple terms why a particular strategy or planning type is being used. It's easy to get lost among the complexity of planning. However, if you keep your eye on your goals, you'll come out with an estate plan that is well suited and well tailored for your specific needs and desires.

How we meet these various goals is dealt with in other sections of this site. However, you need to keep in mind your specific goals throughout the process. At times, two goals may conflict and you need to be prepared to choose which is primary for you.