You may have heard the expression “the right tool for the right job,” and a lot of times what separates the professionals from the rest of us is the fact that they have the right tools at their disposal.

When it comes to estate planning there are different tools that are utilized under varying circumstances.  There can be more to it than simply drawing up a last will, and this is why it is advisable to work with an Indianapolis estate planning lawyer when you are contemplating your legacy.

One option that you may want to consider would be to utilize an RLT or revocable living trust as your primary vehicle of asset transfer rather than a last will.  The use of a revocable living trust enables probate avoidance, and probate carries some significant pitfalls with it.  For one thing, it is a public proceeding and privacy is important to many individuals.

Probate can also take a lot of time to run its course and bequests are not distributed until the estate has been closed by the probate court.  And perhaps most importantly, probate is quite expensive and probate costs can erode the value of your estate considerably.

A revocable living trust can also include an incapacity component that provides directions in the event of your incapacitation, and this is another part of the appeal.

If you are interested in exploring the possibility of creating a revocable living trust, don’t hesitate to pick up the phone and arrange for a consultation with an experienced and savvy Indianapolis estate planning attorney.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Estate planning attorneys typically utilize multiple variations of the same types of legal instruments.  This can sometimes lead to confusion among people who are trying to understand what estate planning is all about.  Some of these terms are rather wordy and complex, but even some of the simpler ones can be a bit misleading because of the way that they overlap.  With this in mind we would like to clear up some popular misconceptions about three very commonly used estate planning vehicles.

Last Wills

Everyone knows what a last will is in a general sense. It is the most commonly used vehicle of asset transfer for people who are engaged in the process of estate planning.  When you use a last will as your primary vehicle of asset transfer, your estate must pass through the process of probate before your heirs will receive their inheritances.  Probate can be costly and time-consuming, so people sometimes implement strategies to avoid it.

Living Trusts

Living trusts are estate planning vehicles that take effect while the grantor is still alive.  Living trusts offer a number of advantages over last wills, not the least of which is the fact that they facilitate the transfer of assets outside of the probate process.  Because of this many people choose to use living trusts as their primary vehicle of asset transfer instead of last wills.

Living Wills

A living will is an advance health care directive, and as such it does not serve any financial purpose.  With a living will you make your preferences known with regard to the types of medical procedures you would accept and those that you would deny should you become incapacitated at some point in time.  Because most individuals recognize the term “will” as a vehicle of asset transfer, sometimes people will assume that a living will serves the purpose that is actually served by a living trust.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

When you are planning your estate, the primary reason why it requires “planning” aside from simply deciding who will be the direct recipients of your assets after you pass away, is to make sure that your resources remain intact during the process of transfer.  Ideally you would also like your heirs to receive their inheritances in a timely manner with minimal administrative hassles.  This is why many people choose to create revocable living trusts as their primary instrument of transfer rather than wills.

When you use a basic will as your vehicle of transfer your estate must pass through the process of probate, which is when the probate or surrogate court will determine the validity of the will and supervise its administration by the executor or personal representative.

This process can take a good bit of time; depending on the complexity of the estate and whether or not the will is being contested, the process of probate could take anywhere from perhaps nine months to several years.  Of course your family members will not receive their inheritances until probate has ended and the estate has been formally closed.  So probate does result in the type of “administrative hassles” that you would ideally like to avoid.

Probate can also be expensive, sometimes eroding the overall value of your estate by as much as 5% to 7%. The probate court itself charges a fee, and there will be legal and executor fees.  In many cases, the executor will have to bring in an accountant to handle taxes, an appraiser or multiple appraisers, and an estate liquidator and all of these entities charge a fee.

The great appeal of the revocable living trust lies in the fact that these vehicles enable the transfer of your assets to your loved ones outside of the probate process.  As a result, you avoid the expenses and time consumption that go along with probate and your loved ones receive their inheritances quickly, efficiently, and outside of the public eye.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

A Revocable Living Trust is a commonly used estate planning tool.  It works in conjunction with ancillary documents such as a Pour-Over-Will, Financial Powers of Attorney, Medical Powers of Attorney, the Living Will, HIPAA Releases, and Organ Donation forms. “Revocable” means that the Trust can be revoked or amended at any time.  “Living” means that you create the Trust while you are alive.  And, a “Trust” is a type of contract.

Here is a summary of Revocable Living Trust benefits:

1. You remain in control. When you use a Revocable Living Trust as an estate planning tool, you remain in control.  You can change the terms of the Trust at any time you are alive and well.  You can put assets in or take assets out of the Trust at will.  In most cases, you are the Trustmaker (the person who created the Trust), the Trustee (the person who legally owns trust assets and is in charge of the Trust), and the beneficiary of the Trust. You even remain in control should you become disabled and when you die as you are leaving specific instructions as to what you want to happen.  The Trust speaks for you when you cannot.
2. The Trust takes care of you while you’re alive.  Unlike a Will, which is effective only after your death, the Revocable Living Trust defines when you are disabled (usually a mental disability wherein you cannot manage your finances or day to day affairs).  The Trust also includes provisions as to who will step up and manage your property and see to your care.  This person is often called a “Disability Trustee.”
3. You can protect your spouse’s and children’s inheritance.  With a Revocable Living Trust, you can give asset protection to your spouse and children that you can’t get for yourself domestically.  Give your gift in a trust instead of outright and you can keep it from disappearing in a divorce, bankruptcy, lawsuit, medical crisis, or addiction.

Consult a qualified estate planning attorney if you have questions about these tips or about Revocable Living Trusts in general.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.