Know What You Need and Start Early.
We help our clients in preparing their revocable living trusts, pour-over wills, durable powers of attorney, and advance health care directives. These instruments are part of a secure foundation for wealth planning, asset preservation, and wealth transfer.
CH Counsel will help you protect your legacy, ensure your wishes are carried out, and make certain your estate will be distributed after your death without going into probate.
The four documents you need for estate planning are:
- 1. Revocable Living Trust
- A Revocable Living Trust avoids probate when your home and other assets are vested in your Trust.
- You select who will be in charge and set the rules for distribution of your assets.
- 2. A Pour Over Will
- A Will is the preferred document to nominate guardians for your children.
- A Will by itself does not avoid probate, so a Trust is executed at the same time.
- The Will functions to “pour over” assets to your Trust.
- 3. Power of Attorney & Advance Health Care Directive
- a. The Power of Attorney and Advance Health Care Directive go hand in hand as documents three and four. They are vehicles by which you nominate loved ones to make financial and medical decisions on your behalf if you are alive, but not well, and/or you are unable to make decisions for yourself.
- b. Examples where Advance Health Care Directives come into play are: If you’ve been in car accident, are suffering a temporary or permanent mental incapacity, or are not aging well.
Special Needs Trusts for Individuals with Disabilities
Special Needs Trusts (SNTs) allow for a disabled person to maintain access to public assistance benefits after receiving a settlement or judgment award, or when receiving money through an inheritance. If a special needs individual receives a sum of money, whether through a settlement or inheritance, this generally disqualifies them from eligibility for the public benefits they need to live. A Special Needs Trust prevents ineligibility by setting aside the money in trust.
The three types of special needs trusts are:
First-party SNT – This is funded with assets or income that belong to the special needs individual. It is typically established with money awarded from a settlement or judgment. (This is most commonly the area we work in).
Third-party SNT – This is funded with assets belonging to someone else and usually comes from an inheritance. The third-party SNT is often referred to as a Supplemental Needs Trust.
Pooled Trust – A pooled special needs trust is managed by a non-profit organization instead of a single trustee for the benefit of multiple beneficiaries. It is designed to protect a physically or mentally disabled person’s assets while still ensuring the individual can receive government aid.
Trust administration occurs when the creator of the trust has passed away and the assets of the trust need to be managed and distributed.
Closing out an estate can be a complicated process, especially when there are many assets involved.
Unlike probate, trust administration is a private administration of the assets in the trust. We work with the successor trustee to act as a fiduciary and ensure the trust assets are managed according to the wishes of the deceased person.
The trust administration process looks like this:
- – Review estate planning documents
- – Meet with the successor trustee
- – Notify the beneficiaries and heirs
- – Ensure all assets named are in the trust—If not, file a “Heggstad” petition.
- – Obtain appraisals of assets
- – Manage assets as a fiduciary—Invest or properly liquidate assets if needed
- – Pay debts
- – Prepare Trust Accounting
- – Final step— distribute assets and file trust tax return
Probate is a legal procedure overseen by the court that handles the transfer of assets from a deceased person to their heirs. It is what happens if a deceased person did not have a revocable trust in place.
If the deceased person has executed a will, the probate process will include authenticating the will. Probate activities involve paying off debts and distributing assets to beneficiaries.
Because probate is handled in court, it can take a long time (up to a year or more) to complete in some cases. Because of its complexity, probate tasks should not be handled without experienced counsel such as CH Counsel to ensure everything is handled in the appropriate manner and that your interests are protected.
So many of the items relating to estate planning, Special Needs Trusts, Trust Administration, and Probate are adhering to state laws that can change or be somewhat ambiguous. For that reason, it is useful to work with professionals experienced in this field. Your descendants and their families will appreciate your carefulness!
Estate Plan Package
Whether you need to create an estate plan or update an existing plan, we are here to help. The future is not certain; act now to control how your assets are taxed, managed and distributed when you’re gone.
Our estate planning package includes:
- Onboarding phone call
- Durable Power of Attorney
- Advanced Health Care Directive