It can be tough to decipher all of the requirements and rules in estate planning documents, along with the probate process. If you can’t figure it out, you may unintentionally leave your family in a bind after you die.
As I begin the estate planning process with clients, it is not unusual for them to think that having a Last Will and Testament means their estate will avoid probate. That’s simply not true. Wills mandate probate; the primary purpose of this process is to make sure that a decedent’s creditors are paid before assets are passed to the proper heirs and beneficiaries. The will is a statement to the court of the decedent’s wishes as to how he or she wants assets to be distributed after death. However, everyone needs a will. Additional estate planning, like a revocable living trust, may be needed to avoid the probate process.
Another common mistake clients make is in their belief that they don’t need an estate plan because they aren’t worth much money. Some folks believe that if their estate is less than $5,450,000 (the Federal Estate Tax Exemption amount for 2016), there’s no need for a revocable trust. This too is not true. While the exemption figure is the amount that can pass to beneficiaries without any federal estate tax there are many other reasons to create a trust that have nothing to do with taxes and more to do with one's family dynamic. Therefore, any amount of money—regardless of how much or how little—will need to be probated without proper planning.
Some people worry that putting property into a revocable trust will limit what they can do with the property during their lifetime. However, during the Trustmaker lifetime, a revocable trust that is properly drafted by an experienced trust attorney is the Trustmaker's alter ego. The Trustmaker retains the right to amend the terms of the trust to adapt to changes in family circumstances or changes in family finances. Anything placed in the trust is under the Trustmaker's complete control when acting as the Trustee of the trust. Therefore, a Trustmaker has no limits as to what they can do with a property that’s put into a revocable trust.
Proper planning can make things much easier for your family. Wills and trusts are tools that can be extremely helpful in accomplishing your estate planning goals. Speak with an experienced estate planning lawyer so that you don’t fall victim to the misconceptions and incorrect information that’s out there. Call us to book your complimentary consultation or click this link to request a consultation.
Reference: Treasure Coast Palm (December 2, 2016) “Common misconceptions about wills and trusts”