Who needs an Estate Plan?
- If you own any interest in any property including retirement plans or life insurance policies you need an Estate Plan that tells loved ones what will happen to your property when you die.
- If you have people who rely upon you for care and support, especially children, you need an Estate Plan to direct who will continue the care and support if you are unable.
- If you have concerns about how your health care and/or financial decisions will be made if you are unable to do so for yourself you need an Estate Plan that will name who should make those decisions for you.
The Process of preparing your Estate Plan with us.
The estate planning process begins when you call us for an appointment. The first meeting should be no more than 90 minutes. At that time we will discuss your needs and will suggest an estate plan that is best suited to your needs. You will also be told the cost of each plan. You decide which plan is best for you and your pocketbook. If you decide not to continue with us, there is no charge for the first meeting. If you decide to let us prepare your estate plan, the first meeting is included in the total cost.
The Cost of an Estate Plan.
From our many years of experience we realize the necessity of a good estate plan. Therefore we will do our best to structure a plan that is affordable for you. Additionally there is no cost for the first meeting where we are able to determine what plan best meets your needs.
Parts of an Estate Plan.
Your Will distributes property which is owned solely by you. A Will generally does not affect the distribution of assets like life insurance, retirement plans or annuities unless you do not name a beneficiary. You appoint your executor in your Will. Your executor manages your estate after your death, paying your bills and distributing your estate according to your directions as stated in your Will.
Appointment of Health Care Representative
You appoint a person to make health care decisions, including end of life decisions,for you in the event you are unable to communicate your wishes.
You make your wishes known with regard to end of life decisions to your health care representative along with your family, your friends, clergy and health care professionals.
Durable Power of Attorney
This document is only valid while your are alive and is perhaps your most important document because it ensures that your affairs will be managed by someone you trust in the event you become incapable of mananging your affairs for yourself. You select the person who will manage your bank accounts, real estate and financial affairs. However, the person you appoint must be completely trust worthy as he or she will have complete access to your financial life.
Appointment of Guardian and Standby Guardian
You name the person or persons you wish to take care of your minor children in the event of your incapacity or death.
Designation of Conservator
If you become legally incapacitated as determined by the Probate Court and do not have a the Probate Court will appoint a Conservator of your person and/or estate. The Designation of Conservator tells the court who you would prefer to be appointed.
Leaving written instructions and naming a person to enforce your directions will save your family a lot of emotional strain.
Trusts can be a useful part of an Estate Plan and can be used for various purposes.
Trusts can be used
- to protect money from creditors
- to provide resources to someone without disqualifying them from receiving governmental assistance
- to manage money on behalf of orphaned children
A Trust is just an agreement between you (the grantor) and someone you trust (the trustee) to follow your directions as to how the property you give to the trustee will be used for the beneficiaries (who you also choose, such as children, or a spouse or even yourself).
Types of Trusts
- Living Trust - A Living Trust is simply a Trust which you create during your life and can transfer assets to during your life. Assets transferred to your trust during your life can be used for your benefit. Depending upon how you set up the trust, upon your death, the trustee can either distribute assets to those you have designated or can continue to hold the assets for the benefit of those you have designated. The assets in the Trust are not included in your estate for probate purposes but are part of your taxable estate. Additionally the Trust is not a public record allowing the terms of the Trust to remain private.
- Testamentary Trust - A Testamentary Trust is a trust which is part of your Will and only takes effect upon your death. The assets are part of your estate for probate purposes and the Probate Court has oversight of the activities of the Trustee. The Testamentary Trust like your Will becomes a public document upon your death.
- Family Trust/Children’s Trust – Generally any property left to children will be held for them under Probate Court jurisdiction until they are 18 years old at which time the property is distributed to them. Alternatively property can be left to a Custodiat under the Uniform Transfers to Minors Act and held for the child until they are 21 years old at which time the property is distributed to them. Most families are not comfortable with an 18 or 21 year old having unrestricted access to large amounts of money, so we create a Family Trust which can hold property in trust for whatever time period specified by the parents. While the property is held in trust, the Trustee can be directed to pay for the child's needs, including education and health care.
- Credit Shelter Trust – A Credit Shelter Trust is a mechanism used by estate planning attorneys to help you take full advantage of the federal and state estate tax credits thereby reducing the amount of taxes paid out of your estate and increasing the amount of your estate which passes to your beneficiaries. Generally a Credit Shelter Trust will divide an estate into two parts, one called a Marital Trust or Gift (which is for the spouse) and the other called the Family Trust (which generally is for the spouse and the surviving family members). A credit shelter trust can be part of either a Living Trust or a Testamentary Trust.
- QTIP Trust - A QTIP (Qualified Terminable Trust Property) Trust is one which is for the benefit of a surviving spouse and allows the surviving spouse the benefit of receiving the income from the trust during the surviving spouse’s lifetime but allows you to name who will receive the remaining property upon the surviving spouse’s death. These types of trusts are particularly useful for second marriages. A QTIP Trust can be part of a Living Trust or a Testamentary Trust and can be the Marital portion of the Credit Shelter Trust.
- Special Needs Trust - Families with children with special needs know that if their children have assets over a certain amount (as determined from time to time by the government) their children cannot receive the necessary assistance from governmental programs. Therefore we can work with families to create a trust with the purpose of providing financial assistance upon their death to their special needs children without disqualifying them for governmental assistance.
- Irrevocable Life Insurance Trusts - Generally, life insurance proceeds are included in your estate for estate tax purposes. So, large life insurance policies can result in unintended estate taxes. In some circumstances, we can eliminate those estate taxes if the insurance policy is owned by a specific kind of trust.
Any asset such as life insurance, 401(k) plans, Individual Retirement Accounts (IRA) or annuities that have beneficiary designations, will be distributed the way your beneficiary designation directs. Your Will has no affect on the distribution of these assets unless you neglect to designate a beneficiary. For many reasons it is almost never beneficial to your heirs to have these assets go to your estate. In many instances we believe your beneficiary designations are more important than your Will and we work with you to make sure the beneficiary designation forms reflect your particular wishes.
Property you own with someone else with rights of survivorship, such as real estate or bank accounts, will automatically be distributed to that person if you die first. We work with you to make sure that your property is owned correctly so that it will be distributed according to your wishes.
Transfer on Death and Payable on Death Accounts
Many financial institutions offer the ability to name individuals who will receive the assets in your account upon your death. The naming of a person to whom these type of accounts will override anything in a Will or Trust. In some instances this may be an appropriate way of transferring your assets. We work with our clients to use the method for transfer that is most appropriate for their circumstances.
901 Farmington Avenue
West Hartford, Connecticut 06119
voice & fax 860.523.8381