What is a revocable trust? How can I avoid probating my estate? Do I really need a will? What will happen to my estate if I die? Can I handle everything with a power of attorney?
At William W. Fischer, P.C., we can answer these questions for you and help you understand your estate planning options. With more than 38 years of experience, we can help you develop a strategy to provide for your loved one and protect your assets.
What Is Estate Planning?
Estate planning is a process whereby a person signs different documents that provide for the transfer of ownership in assets belonging to the decedent. Depending on the particular documents utilized, it is possible to avoid probate court entirely.
What Assets Pass Through Probate?
Anyone establishing an estate plan should remember that only assets "owned" in the name of the decedent are subject to probate court jurisdiction. Therefore, assets held as a "joint tenant with full rights of survivorship" are not subject to probate court jurisdiction. Thus, all assets owned by a husband and wife (joint tenancy) pass to the surviving spouse by operation of law.
What Information Do I Need to Bring to an Attorney?
Estate planning usually involves the execution of a durable power of attorney (which is automatically revoked at death), a last will and testament, a living will and other testamentary documents. In establishing an estate plan, the drafter will want to know:
- The names of spouse, children and grandchildren;
- The names of any individuals receiving specific bequests;
- The listing of specific bequests, including a way to identify each item;
- What happens to a specific bequest (item) if the person dies before the testator;
- Who (all the people) gets the residue of the decedent's estate after making all the specific bequests;
- The names of any relatives who are not to receive any part of the decedent's estate;
- Who will be responsible for administrating the estate;
- Who will serve as the patient advocate in the event the testator desires to appoint such a person;
- What exactly is the patient advocate to do;
- Who will serve as attorney-in-fact (power of attorney) to handle the decedent's affairs immediately prior to death, and what is this person's address;
- Where all the important documents are located;
- Is there a need for a trust?
What Is a Trust?
Trusts are sometimes referred to as "private wills." The reason is that upon death of the person who establishes the trust (the grantor) the assets are managed and/or distributed to beneficiaries according to the trust terms. Unlike wills, trusts are not a matter of public record.
An individual will want to establish a trust (usually revocable) to handle the management and distribution of the decedent's estate. This will be done outside the probate court, and it requires some specific directions for the successor trustee (the person taking over after the decedent dies). A trust requires a grantor (the person establishing the trust itself), a beneficiary (usually the decedent during his/her lifetime and thereafter the residual beneficiaries) and a trustee (usually the grantor until death and then the named successor trustee).
Only assets held by the trust are distributed by its terms, so the grantor must fund the trust by putting assets into it. For example, a deed is used to transfer real estate to the trust.
Most trusts are revocable, meaning the grantor can end the trust by simply doing so in a written "revocation" document. Most trusts are amendable, meaning the grantor can make changes to any part of the trust document.
If the trust is revocable, we do not need to obtain a Federal Tax Identification Number. We simply use the person's individual Social Security number for tax reporting purposes.
Family trusts often are established by a husband and wife (as grantors), and are (1) usually revocable by either during their joint lifetimes, (2) amendable by both during their joint lifetimes, (3) and irrevocable upon the death of the first of them to die. Family trusts are often utilized to ensure that the marital estate, though funds are usually accessible to the surviving spouse, ultimately is distributed to the children, and not someone else.
Contact Our Michigan Firm
There are numerous documents used in estate planning which together accomplish the decedent's testamentary wishes. Contact the estate planning lawyers at William W. Fischer, P.C., for a free consultation. We accept all major credit cards and payment plans are available where appropriate.