Who Are The Necessary Parties Involved In An Estate Plan?

As far as professionals are involved, you will need a lawyer and possibly a financial advisor. If you are regularly managing your finances with your accountant, you would want to discuss income tax and other financial issues with him/her. Otherwise, your team would include yourself and your spouse. Sometimes, you may wish to involve your adult children, so that they would be advised as to what your intentions are.

What About The Basic Items In An Estate Plan? What Does Each Item Do For You?

The basic items are the will, the trust, the power of attorney for property, and the power of attorney for healthcare. In the will, you get to name your legal representative, your executor, and a successor executor. If a will is coupled with a trust, the will is what is called a “pour over” will as assets that you hold in your own name will be poured over into the trust created during your lifetime. Wills oftentimes will waive a surety bond for the executor, which can be very significant cost savings. Surety bonds, like an insurance policy, endure that the estate, if the appointed legal representative mishandles the affairs, will be indemnified for such losses. In most cases where you have named a trusted person as your personal representative, you’re usually naming your spouse, a sibling, or your attorney, a surety bond may be waived, saving the cost of the premium on that bond.

Under a will, the maker of the will selects the person or persons who they prefer to be the guardians of their children. The child’s personal would be the one with whom the child or children will reside and who will make decisions going forward regarding their upbringing and education until they reach the age of 18. There is also the choice of a guardian of the estate of the child. If the child has assets of their own and they’re under the age of 18, they need a guardian of their estate who will manage those assets during their minority. Oftentimes, if the assets are in trust, then the guardian of the estate would be superfluous and not appointed.

If there is no trust involved, then your will is what will determine the disposition of your assets and the division of your assets among your beneficiaries. A trust is recommended for most individuals with assets of $100,000 or more. Included in this calculation is life insurance and retirement benefits. The trust is called a living trust. Most of the time, it is revocable, which means you can trash it or amend it at any time. Many times, these trusts are amended five or six times or even more. The trust will provide for a trustee to manage the estate during your lifetime, as well as after your death. Most often, that trustee during your lifetime is yourself.

If you become incapacitated, a successor trustee of your choice trust will provide for an individual to manage your assets for your benefit. Then, after your death, they will continue to manage the assets for the benefit of your beneficiaries, such as your surviving spouse and/or children. Oftentimes, you leave a surviving spouse as well as children. That trust will have provisions which govern the disposition of income and principal, and the investments of the assets for the time that the trust remains in existence, which would usually be for the life of the surviving spouse. Then, it would be distributed to the children, after the death of the surviving spouse, or it might just be held in trust for the children until they reach certain age(s) when they would be able to handle and manage those assets.

Sometimes, the children might not even be given the right to receive distributions, and the discretion will have the sole discretion to determine how much income or principal that they need. It depends on the capability of the children, their health, and their ability to manage assets. The trust can be written in many different ways. It all depends on the family, the children, and what the creator of the trusts thinks will be in the best interests of the family. The trust also can have a trust protector, who can be given powers to make changes in the terms of the trust for the benefit of the trust’s beneficiaries.

For example, a child or children have creditor problems. They should not have the right to receive the distributions, because it’s just going to go to the creditors. The trust protector can be given the power to withhold those distributions in their discretion. There are lots of different permutations and combinations, depending on the family. That is why most of the time, trusts are revocable, which means they can be changed at any time.

For more information on Necessary Parties Involved In An Estate Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (312) 236-7005 today.