There are individuals out there who question why you would want to (or need to) engage the services of an estate planning attorney.  They figure that all you have to do is draw up a last will and the matter is closed.  And in fact, there are websites out there that will sell you blank generic last will documents.  They tell you that all you have to do is fill in the blanks and you have all of your bases covered.

The truth is that estate planning is not something that you want to take on as a hobby or Do-it-Yourself project.  It is a serious matter that involves transferring very significant financial assets to those that you love the most as your final act of giving.  Doing so requires expert advice, and one of the reasons for this is because of the fact that you as a layperson are probably not aware of all of the various estate planning vehicles that are available to you.

One of these legal instruments is the charitable remainder unitrust or CRUT.  These trusts can satisfy your philanthropic desires while providing you with an ongoing source of tax efficient income for life.  The way that it works is you fund the trust and make yourself the primary beneficiary and the trustee.  You receive annuity payments from the trust equaling at least 5% of its value but no more than 50% of its value annually. You also name a charitable beneficiary who will inherit the remainder that exists at the end of the trust term, and this remainder must be at least 10% of the original fair market value of the trust.

When you fund the trust you are removing those assets from your estate so you gain estate tax efficiency in the process.  You are also entitled to a charitable deduction under IRS regulations governing charitable remainder unitrusts.  If you place appreciated securities into the trust they can be sold incrementally by the trust and as a result your capital gains responsibility will be spread out over the trust term.  And in addition, because it is an irrevocable trust assets placed within it are protected from creditors.

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

Depending on the size and scope of your assets and the specific nature of your wishes it may be necessary to implement a combination of estate planning instruments to enable the optimal transfer of assets.  However, when you engage the services of an experienced estate planning attorney, he or she can greatly simplify the matter and explain your options to you in an understandable manner.

This having been stated a lot of people are only going to need a very basic estate plan.  Everyone must decide on some vehicle of asset transfer, and it is also wise to have an incapacity plan in place so that decision-makers of your own choosing are empowered to act in the event of your incapacitation.

When it comes to passing along assets to your loved ones most individuals immediately think of the last will, and this is of course an option.  But when you use a last will as your primary vehicle of asset transfer your estate must pass through the process of probate.  There are pitfalls involved with probate including significant expenses, and many people choose to avoid it through the creation of revocable living trusts.  With these vehicles the transfer of assets takes place outside of the probate process so it is done more quickly and efficiently.

For the most part incapacity planning revolves around executing the appropriate powers of attorney.  You would want to use durable powers of attorney because they remain in effect upon the incapacitation of the grantor.  With these documents you name attorneys-in-fact who are empowered to act in your behalf should you become unable to make decisions on your own at some point in time.

The best way to approach estate planning is to recognize the fact that it is a legal matter that requires the expertise of an experienced estate planning attorney.  With this mind, your first step is simple: arrange for a consultation with an elder law or estate planning specialist.

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

Everyone has heard of the last will, which is the most common vehicle of asset transfer used in the field of estate planning.  It is interesting to note that in the past this document was comprised of two different components and generally termed the “last will and testament.”   When it was broken down in this manner, the will was used to transfer real property and the testament was the portion of the document that was devoted to the transfer of personal property.  During current times the distinction between the two is rarely used and the document is simply known as a last will.

There’s another type of will that is widely recommended in estate planning circles these days called a living will.  The living will is used to state your preferences regarding medical procedures should you become unable to answer questions in real time due to incapacitation. The issue that is central to these documents is usually going to be whether or not you would want to be kept alive through the use of artificial life support systems if you were in a terminal condition.

There is a third type of will that is not as well known as the first two called the ethical will that you may want to consider including in your estate plan.  The ethical will dates back to biblical times and has been a part of the Jewish tradition for centuries, used to pass along the moral and spiritual insights of the author to future generations.  These days it is used by people of all faiths and by some people who are not particularly religious at all.

With the ethical will there are no hard and fast rules about what can and cannot be included.  It is simply a final letter of sorts presented to your loved ones intended to pass along information that you want them to know.  Composing an ethical will can be personally cathartic to the author as well as extremely instructive to the readers.  An ethical will can provide your family members with wisdom that money cannot buy, and this shared experience and insight may be the greatest gift that you can give them.

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

When the layperson hears the term “estate planning” the thing that usually comes to mind is the last will, and this is of course one way to pass along your assets to your loved ones after you die. However, many people prefer to use a trust such as a revocable living trust once they pay a visit to an estate planning attorney and hear about all the options that are available to them.

For the majority of individuals the primary reason why a trust may be preferable to a last will is because the transfer of assets facilitated by the trust does not have to pass through the process of probate.  Probate is the period during which the validity of your will is determined by the probate court, and anyone who wanted to contest the will could do so during this interim.  The possibility of will challenges in and of itself is one of the reasons why people choose to avoid probate.

In addition to this, probate is time-consuming and it can be expensive.  Your heirs will not receive their inheritances until the estate has been probated and closed, and this can take anywhere from several months to multiple years depending on the complexity of the case. Expenses involved with the probate process can consume anywhere from perhaps 2% to in excess of 5% of the total value of your estate.

These are the reasons why you might want to avoid probate via the creation of a trust.   But if you do, you would also want to include a pour-over will.  You may acquire property after you have created the trust, and for logistic reasons you may choose not to place certain property into the trust while you’re still alive.  The pour-over will directs any assets that you have remaining into the trust after you pass away so that none of your personal property is subject to distribution via the law of descent.

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

When you pass away, utilizing a will as your primary vehicle of asset transfer your estate must pass through the legal process of probate.  Probate provides certain protections because it ensures the court supervised administration of your estate, but there are pitfalls involved with probate as well.

What are these pitfalls?  Interestingly enough, one of the protections that probate provides for those who survive you can be seen as a negative by some.  During the probate process interested parties can challenge the will, and this recourse is quite useful for the disgruntled party but you may prefer to keep this avenue closed.

It would be nice if all of your family members honored your final wishes without protest, but things don’t always go so smoothly and no one receives their inheritances while the matter is hung up in probate.  Passing along your assets outside of the probate process via a revocable living trust could eliminate the possibility of a contested will.  In fact, you could stipulate that anyone who voices displeasure with the terms of the trust be disinherited if that was your choice.

Another good reason why you may want to consider avoiding probate would be to avoid the costs involved.  The probate court charges a fee right off the top, and the executor or personal representative of the estate is entitled to a fee as well.  In addition, the executor will have to bring in a probate attorney, and he or she may have to engage a tax accountant, appraisers, and an estate liquidation company, but of course all of these entities charge for their services.  In all these expenses can add up to over 5% of the total value of the estate in some cases.  This is all money coming out of the pockets of your loved ones.

In the final analysis the best way to decide whether or not probate avoidance is the right choice for you would be to discuss the matter with an experienced estate planning attorney who will advise you based on the anatomy of your assets and the specificity of your wishes.

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.

When creating a Will, it is not a once and done activity.  Estate planning, which includes creating a Will, is a process.  It is wise to consult with your estate planning attorney every three to five years to update your plan to reflect changes in your life, goals, and assets; changes in the law; and changes in your estate planning attorney’s experience.  When creating a Will keep in mind that you should contact your estate planning attorney immediately (don’t wait for the three to five years to expire) if any of the following are applicable for you:

1. You get married or divorced

2. You have a new life partner

3. You have a baby or adopt a child

4. Your assets change significantly

5. You move to a new state

6. Your goals or choices change

You need to update your Will and all of your estate planning documents if you get married or divorced.  A spouse is legally entitled to inherit from you in most states, unless you have a contract indicating otherwise such as a prenuptial agreement.  If you get divorced, your goals likely have changed as well.  And, in many states any gift in your Will is automatically revoked upon divorce.

You need to update your Will if you have a new life partner. If you are not married, your life partner does not have the legal right to inherit from you.  You need to put your wishes in writing legally so as not to disinherit your partner.  Laws vary from state to state so consult with a qualified estate planning attorney to guide you through the process of creating a new Will.

You need to update your Will if you have a new child.  A Will is used to name a guardian for minor children and you may make financial provisions for your child in your Will.  If you have stepchildren, they have no legal right to inherit unless you make specific provisions for them. Unlike adopted children, they are not automatically included when you use the term “my children” in your Will.

You need to update your Will if you acquire or dispose of large assets.  If you have come into a large sum of money, it is likely that you will need estate planning different than that you currently have.  And, if you’ve made specific gifts of assets you have sold or given away, your Will should be updated accordingly.

You need to update your Will if you move because even though your current Will may be technically valid, it is cumbersome to administer a Will under another state and you’ll likely have to hire two attorneys to do so, one in your new state and one in your previous state.

And, lastly, you need to update your Will simply if you change your mind.  Let your estate planning attorney know if your goals change or if you have any questions.

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

The future always seems uncertain, and that will never change for any of us, even as many young children begin taking the first steps, it’s not too early to make long-term plans to ensure their financial security. Inheritance planning when children are too young to act for themselves can ensure their financial security for many years to come.

There are many different directions that a person’s belongings or estate could head after the person has passed; after probate laws and surrogate courts have their way. It makes good sense to start a dialog as soon as possible with family and friends about what their responsibilities are in carrying out your wishes, or what they stand to inherit, so that you can be better informed before drawing up official documents detailing these bequeathals. The more is discussed beforehand, the less likely there are to be surprises or disagreements over smaller potential ambiguities of Wills or related legal documents.

If nothing else, a first line of defense is creating a will so that your directives are clearly outlined. This is the simplest way to list who gets which property or other assets. Creating a legal will can be just about as simple as writing your name and stating your intentions to leave such and such to so and so, but are wills really effective in covering trickier assets?

A more important question is, If there was a way to ensure that you pay less estate tax, and therefore have more control over who gets what, would you take it? Of course you would! That’s what inheritance planning really is, particularly when it involves the use of trusts and well thought out trust administration to carry out the plan. Feel free to browse this site to learn more about inheritance planning, or call us at (317) 684-1100 to get direct guidance.

Contact us today to find out more about protecting your estate with solid estate planning designed by knowledgeable professionals with years of experience.

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

The short answer to this question is that the person who has named you as executor trusts you to see that the bequests made in the will are carried out. The more complicated answer is that the executor has many duties to the estate and can be liable if such things as the estate taxes are not paid. Some of the duties of the executor are

• Distributing assets according to the dictates of the will
• Paying debts of the estate and final debts of the deceased
• Maintaining assets of the estate such as a house until they are sold
• Notify beneficiaries of bequests
• Making court appearances as necessary for the estate
• Paying taxes on the estate

Do you have to serve as Executor just because you have been named by the decedent? No, you can decline the responsibility of being an executor. If you are drafting a will, it is wise to name an alternate if the person you name cannot act as executor or has to step down for some reason. If you do not name an alternate executor, the probate court will have to name an alternate executor.

In most cases, an executor of an estate does not accept payment for their duties but they do have the right to be paid. An executor is more likely to want or need payment in complicated estates that take more work. In these cases, an executor may have to hire a lawyer or other professionals such as accountants to handle taxes issues or an appraiser to help value the estate. The vast majority of wills are simple and routine; being the executor of a will is not necessarily a chore that you seek to avoid.

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

While a Revocable Living Trust is a great estate planning method for avoiding probate and for preparing for potential mental incapacity, there are some things it just can’t do. Here are three examples:

1. Protect Assets from Creditors. If someone wins a lawsuit against you that entitles them to money damages, they become what’s called a “judgment creditor.” A judgment creditor can levy on your property in order to collect the amount owed, and a Revocable Living Trust does not shield your property in this situation. You may be surprised how many people become defendants in lawsuits; all it takes is a car accident or the inability to pay someone money you owe them, and your property could be at stake. Fortunately, an estate planning attorney can help you develop an asset protection plan – as long as you plan ahead and don’t wait until a lawsuit is on the horizon.
2. Automatically Avoid Probate. Simply having a Revocable Living Trust in place is not enough to keep your property from being probated. Your trust needs to be properly funded, meaning that you have to transfer your assets into the trust, so that the Trustee has access to them after you pass away. Any property that’s left out of your trust may be subject to the probate process. This is why everyone who has a Revocable Living Trust should also have a special type of will, called a “pour over” will. This document acts as a catch-all, so that if some of your property is not funded into your trust at the time of your death, it will “pour” into your trust as part of the probate process, and will ultimately be distributed according to the terms of your trust.
3. Reduce Your Taxes (Without Special Additions). As stated above, the main purposes of a Revocable Living Trust are to help your loved ones avoid probate and plan for mental incapacity. It’s also used to keep your personal affairs private and confidential. Often, married trust makers opt to incorporate an AB trust into their Revocable Living Trust in order to gain death tax planning advantages, but without this addition, a Revocable Living Trust offers no estate tax benefits.

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