Frequently Asked Questions

                Click on the plus signs below to see answers to our most commonly asked questions:

What is estate planning?

Estate planning is the preparation of a plan so that if something happens to you, you choose the manner in which your assets are distributed.  You can choose not only who receives your assets, but also when and how those assets are transferred.

I do not have a lot of money so I do not have an estate, correct?

Wrong. If you own a car or have a bank account, you have an estate.  An estate is comprised of your assets (things you own), minus your liabilities (anything you owe), plus any life insurance policies you have.  Your assets include any real estate you own, your business, your car, your bank accounts, your jewelry, your furniture, even your sky miles, and more.

Why should I establish an estate plan?

If you do not establish an estate plan, the people you leave behind will be left with some headaches in transferring your assets.  In addition, people you may not want to receive assets may inherit some of your assets.

What types of estate planning documents are included in an estate plan and what will I need to get started with the process of putting together an estate?

The estate planning documents appropriate for you will depend on your unique situation.  Here is a summary of the various documents that may be included in your estate plan:

  • Advance Directive for Health Care – this document is only valid while you are living. This document not only appoints a designated health care agent for you if you cannot make medical decisions, but also asks for your guidance now in what you want if something happens to you medically.
  • Financial Power of Attorney – this document is also only valid while you are living. This document can be made effective immediately upon signing, giving your agent power over your finances while you are competent, OR you can make this power valid only when a doctor deems you incompetent.  This power appoints an agent to make financial decisions (including paying bills) for you.
  • Revocable or Living Trust – this document uses your social security number until you are incompetent or dead. Any assets inside this document avoid probate (the proving of the Last Will and Testament to the court).  This is recommended if you own real estate outside of the state where you live, if you have privacy issues (like a divorce), if you are older and may need more financial assistance in a relatively short time, and/or if you live in a state where probate is difficult (time-consuming and/or expensive).
  • Irrevocable Trust – this is a document where you are starting the trust now, while you are living, and it needs its own federal identification number. Unlike the Revocable Trust, where the Trustor (you) can amend, change, or revoke it at any time, this document cannot be changed by you.  Typically, this document is used to remove assets from your estate.  It is most commonly used for life insurance.
  • Last Will and Testament – this is a document that disposes of all assets that are in your name (with certain exceptions) at the time that you pass. This document is taken to probate and then the court will give a letter of testamentary allowing the Executor/Personal Representative to distribute the assets.

What are some terms I should be familiar with when creating an estate plan?

    • Personal Representative/Executor – Typically this is a short term position (1 year or less). The person is in charge of final income tax returns and estate tax returns in addition to probating and distributing the assets.
    • Trustee – This person is in charge of the trust monies. They can hire someone or manage the monies themselves and they are in charge of distributing assets per the trust document.
    • Guardian – This person is who your minor children (under age 18) or special needs children will be living with and who will act as their parent if you are gone. This is the hardest decision for most clients.