Understanding The Last Will And Testament
One of the oldest forms of an estate plan is the Last Will and Testament. With this plan, you create a Will that specifies who is to receive your assets after you are gone. You also select your Executor, who is the person you appoint to distribute your assets according to your Will at the end of Probate. Contrary to what some people have heard, and many have been led to believe, a Will does not shield you from Probate, it virtually assures it. The only exception is where your total gross estate is considered a small estate in the state in which you live.
Your state sets by law, a minimum value at which Probate must be conducted. For example, in Virginia the minimum probate threshold is only $15,000, while in Maryland, the minimum threshold is $50,000. While your estate must still usually meet the minimum dollar threshold, a Will cannot be enforced until the court validates it through the Probate process. As with Revocable Living trust, it does not require probate. It’s a private contract between you as the “trust maker” and the trust entity. In most cases, a grantor serves as the trustee of his own revocable living trust, managing the property he places within it. A successor trustee steps in to take over when the Executor dies or becomes incapacitated, settling the trust and distributing its property to the beneficiaries named in the trust.
The drawback to using a Last Will and Testament (Will) for your estate plan is the time and expense associated with Probate. Without a Will, the State will distribute your estate (net of all the probate related costs) in accordance with State Law, not your wishes. You might be surprised to learn that if you are married when you die with no Will, and leave a spouse and children behind, the State will often give 2/3rds of your estate to your children and 1/3rd to your spouse. This may place your spouse in financial jeopardy and if you leave behind minor children, the resulting cost and complexity that ensues Will not only tie your family’s hands but eat away financially at your estate. When a Will is submitted to the court to open probate, it becomes a matter of public record. Anyone can stop by the courthouse and read it. They’ll know what you owned and to whom you left it. No one other than the beneficiaries — and in some states, heirs regardless of whether they’re beneficiaries — are entitled to see the trust documents
Who Needs A Trust
If you meet one of the following qualifications, you need to call us. We can guide you through the estate-planning process and educate you on how an USA Estate Planners can help protect you and your family for generations
Own property in another state
Have special-needs dependent
Desire to plan in case of incapacity
Parents of minor children
Possess assets greater than state probate limit
Singles with assets titled in their name
Married with wishes separate from spouse
Involved in second or later marriage
Have specific wishes for beneficiaries
Wish to donate part of assets to charities
Want to keep financial and other matters private
Types Of Trusts
It can’t be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all his rights of ownership to the assets and the trust.
You can modify the trust at any time, for any reason. If you get remarried, have another child, grandchild, buy another home, etc.
Is a unique type of trust specifically authorized by Congress, that when properly drafted, may enable a person under a physical or mental disability, or an individual with a chronic or acquired illness, to hold, in Trust, an unlimited amount of assets, without those assets being considered countable assets for purposes of qualification for governmental benefits that are based upon need.
“Special needs” is just a term to describe any trust intended to provide benefits without causing the beneficiary to lose public benefits he or she is entitled to receive. A Special Needs Trust is a legal document designed to benefit a beneficiary with a disability. A Special Needs Trust can form part of a Last Will and Testament, but more often it is a document that stands alone. Congress mandates that Special Needs Trusts must be irrevocable to comply with applicable laws.