Estate Planning and Administration
Estate planning is the act of preparing for the transfer of a person’s wealth and assets after his or her death. Assets, life insurance, pensions, investment accounts, real estate, cars, personal belongings, and debts are all part of one’s estate. An estate plan must be written, signed, and notarized. In Idaho it also needs to be witnessed by two neutral parties.
Many people think that they don’t need to do any sort of estate planning, and they think that the existence of a simple will can transfer their assets at the time of their death. However, wills and trusts are simply legal documents that express the decedent’s intentions for how their estate should pass. In order for this to occur in most instances a probate needs to be filed which will seek court approval of the distribution, of the assets and debts. Depending on the type of assets there is also the possibility of filing a small estate affidavit which can transfer up to $100,000.00 worth of assets without filing a probate. This is often used if the decedent’s primary asset is a bank account.
A will is a legal document by which a person, the testator, expresses his or her wishes as to how his or her property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.
A trust is a relationship whereby property is held by one party or entity for the benefit of another. A trust is created by a grantor or a settler who transfers property to a trustee. The trustee holds that property for the trust beneficiaries. An owner of property that places property into trusts turns over part of his or her “bundle of rights” to the trustee, separating the property’s legal ownership and control from its equitable ownership and benefits. This may done for tax minimization reasons or to control the property and its benefits if the settler is absent, incapacitated, or dead. Trusts are frequently created in wills, defining how money and property will be handled for children or other beneficiaries.
In most cases a trust operates much like a will. A trust is however considered to be its own legal entity and can be revocable or irrevocable. Over the past decade trusts have been used by many individuals in an attempt to barricade their assets from Medicare or Medicaid requests for reimbursements. However, as this has happened, Congress continues to pass laws to make it more and more difficult for a trust to serve as a vehicle to safeguard an individual’s assets from the Federal Government.
If you are needing help with any of these areas, contact Felton & Felton Attorneys to schedule your free consultation.