Question 1

What is estate planning?

Accepted Answer

An estate plan is a set of documents created to:
 
-- Ensure that your estate passes to your intended beneficiaries at the time of your death;
-- Nominate the person who will administer your estate at your death;
-- Nominate someone to make medical and financial decisions for you if you become incapacitated;
-- Nominate a guardian to care for your minor children; and
-- Avoid or reduce estate taxes.

Question 2

What documents are typically used in an estate plan?

Accepted Answer

Estate plans usually include a Trust, a Will, a Durable Power of Attorney for Financial Affairs, and an Advance Healthcare Directive. Estate plans for larger or more complex estates may include irrevocable or complex trusts.

Question 3

What is the difference between a Will and a Living Trust?

Accepted Answer

Both documents are created to ensure your property passes to your intended beneficiaries at your death. The major difference is a Will is subject to probate and a Trust is not. When a person dies with a Will, their estate is subject to probate.
 
One very important exception is that there is typically no probate required when a married person gives their entire estate to their spouse. Assets transferred to a Living Trust do not go through probate.

Question 4

What is probate?

Accepted Answer

Probate is a court-supervised process of collecting the assets of a decedent and distributing those assets to their heirs. Probate generally costs more and takes longer than a trust administration. Probate takes at least nine months and the fees are roughly three percent of the value of the estate to the executor and three percent to the attorney for the executor.
 
When the decedent has a Trust, the successor trustee performs essentially the same functions as the executor of the estate, but without court supervision. A trust administration is often completed in less than nine months (unless federal estate taxes are due) and the legal fees are often less than one percent of the value of the trust estate.

Question 5

Does a Living Trust ensure my heirs will not need a lawyer when I die?

Accepted Answer

No. While it is possible for a successor trustee to complete an entire trust administration without legal advice, most will need an attorney to help them with the administration.

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FAQ

What is estate planning?

What documents are typically used in an estate plan?

What is the difference between a Will and a Living Trust?

What is probate?

Does a Living Trust ensure my heirs will not need a lawyer when I die?