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Estate Planning (Will & Trust)
Estate planning
Estate planning is an important part of any financial strategy. At Nest4Future, we help you develop an effective estate plan to protect your loved ones and your legacy.
We partner with Netlaw, an award-winning company backed by estate planning attorneys, to provide easy and affordable online estate planning service.
We offer Notary service and help you with the end-to-end process from creating a living will, setting up your revocable living trust, to funding your primary home and others assets into the living trust.
Netlaw premium probate avoidance package includes the following document suite:
- Last Will & Testament
- Children’s Trust
- Durable Financial Power of Attorney
- Health Care Surrogate Designation
- HIPAA Authorization
- Advanced Directive/Living Will
- Pet Trust
- Revocable Living Trust/Probate Avoidance
- Life Vault Cloud Storage
- Spouse Plan included
What is Estate Planning?
Estate planning is the process of planning or deciding how your estate, your real and personal property and assets, will be passed down to your heirs and beneficiaries. It ensures that your assets are distributed according to your wishes, reduces potential taxes, and provides clear instructions for your care if you become incapacitated. This planning includes the bequest of assets to heirs and the settlement of estate taxes and debts, along with other considerations like the guardianship of minor children and pets.
Why Estate Planning is Important?
The Big Three questions to ask
Who will care for your young children?
Without naming a Guardian, a judge will decide who will have custody and control of your children and their inheritance. Naturally, you want to ensure your children go to the person you trust the most. If you wish to avoid custody battles between family members, you should plan your estate.
What happens to your property?
Suppose you bought a house or car that you want to remain in the family when you pass away. No biggie! After some time in public court, your assets and bank accounts may finally be accessible to the right person. Or maybe not. If you want to avoid uncertainty, you should plan your estate.
Who has the power?
Asking "who has the power" may sound like a silly question initially. However, suppose you become incapacitated for any reason. In that case, you need to have someone you trust appointed to make medical and financial decisions on your behalf. Needless to say, you should plan your estate.
Key Components of Estate Planning
Last Will & Testament:
- A legal document specifying how your assets should be distributed after your death.
Guardianship Designations:
- Naming guardians for minor children or dependents.
Revocable Living Trust:
- Arrangements that allow a third party (trustee) to hold assets on behalf of beneficiaries.
- Can help avoid probate, manage taxes, and provide for minors or individuals with special needs.
Power of Attorney:
- Grants someone the authority to manage your financial affairs if you become incapacitated.
Beneficiary Designations:
- Naming beneficiaries for retirement accounts, insurance policies, and other assets.
- Ensures that these assets pass directly to the designated individuals without probate.
Healthcare Directives:
- Includes living wills and medical powers of attorney.
- Specifies your wishes for medical care and designates someone to make healthcare decisions on your behalf.
Frequently Asked Questions
A Will is a legal document that outlines how a person’s assets and affairs should be handled after their death. A will becomes effective only after the person’s death after it goes through probate.
A trust, on the other hand, is an arrangement where a trustee holds and manages assets on behalf of beneficiaries according to the terms set by the grantor. A trust can take effect during the grantor’s lifetime or after their death. Assets placed in a trust do not go through probate, allowing for a faster and private distribution of assets.
In the context of wills and trusts, the roles of executor, guardian, trustee, and grantor are distinct and serve different purposes. Here is a detailed explanation of each role:
Executor – An executor (also known as a personal representative) is the person appointed in a Will to carry out the instructions and wishes of the deceased, managing their estate through the probate process. The role of an executor is distinct from roles like trustee and guardian, which may be involved in both wills and trusts.
Duties:
- File the will with the probate court to begin the legal process of validating the will.
- Locate and take control of the deceased’s assets.
- Create an inventory of the estate’s assets and liabilities.
- Pay any debts, taxes, and expenses owed by the estate before distributing the remaining assets.
- Distribute the remaining assets to the beneficiaries as specified in the will.
- Ensure that all actions are in compliance with state laws and probate court requirements.
- Keep accurate records of all transactions and communications.
Guardian – A guardian is an individual appointed to care for and manage the affairs of a minor child or an incapacitated person
Duties:
- Provide for the day-to-day needs of the child, including shelter, education, and medical care.
- Manage and protect the child’s financial interests if no trustee is appointed.
Trustee – A trustee is an individual or institution appointed to manage and administer assets placed in a trust according to the trust’s terms.
Duties:
- Manage the trust assets prudently and in the best interests of the beneficiaries.
- Distribute assets to beneficiaries according to the trust’s terms.
- Maintain accurate records and report to beneficiaries as required.
Grantor (also known as Settlor or Trustor):
The grantor is the person who creates the trust and transfers assets into it.
Duties:
- Define the terms of the trust, including how and when assets are to be distributed.
- Transfer assets into the trust.
- May have the right to amend or revoke the trust if it is a revocable living trust.
While both the executor and trustee play critical roles in estate planning, their responsibilities, and contexts differ significantly. The executor deals with administering and settling the estate through the probate process as per the will, while the trustee manages and distributes the assets held in a trust according to the trust’s terms, often bypassing probate. Properly appointing and understanding these roles helps ensure that your estate and wishes are handled smoothly and effectively.
The level of creditor protection offered by a trust depends on the type of trust. Assets in revocable trusts are generally not protected from creditors because you maintain control over the assets. In contrast, assets in certain types of irrevocable trusts may be protected, as you have relinquished control over the assets. However, this can vary based on state laws and specific trust provisions, so it’s important to consult with an estate planning attorney for advice tailored to your situation.