Affordable Estate Protection for Your Family

Tennessee estate planning documents such as Living Trusts and Wills are easy to understand. In short, Trusts accompany Wills because Trusts offer additional control distributing an estate and avoid the loss of time and money in settling an estate. Identify your goals. If dependent children need named guardians, related goals may include maintaining a home for children and their guardians or controlling distributions to young beneficiaries so life insurance money and profits from the sale of a home are not squandered. Other goals may be avoiding probate, estate taxes and preventing an estate from being contested. Determine which documents are right for you. Familiarize yourself with documents and common strategies. For legal advice, your legal, financial and insurance advisors can refer you to estate planning attorneys or try our free directory.

The Purpose of Probate

Probate is a court process, not a tax. The probate process verifies instructions of the Last Will and Testament are followed and ensures the estate’s transition is handled correctly, such as repaying creditor debts and distributing assets to beneficiaries. Probate can be simple for small estates but become complicated with larger estates or beneficiaries contesting the Will. When attorneys are introduced to the process, the cost of the probate process could increase. Typical costs are 3%-10% of the estate’s value. Some assets avoid probate. Assets with beneficiary designations on them, such as life insurance, retirement accounts and bank accounts avoid probate. Assets transferred to a revocable Living Trust prior to the person’s passing also avoid probate.

What Is a Trust?

Trusts and Wills can both provide estate distribution instructions. Trusts don’t replace Wills, they are used in addition to a Will. The difference: while a Will is a piece of paper, a Trust can be thought of as a box to hold your assets during your lifetime and after. Trusts typically stay intact the duration of the beneficiaries’ lifetimes, allowing many basic estate planning objectives to be achieved, such as controlling when and how young beneficiaries receive their inheritance.

Living Trust Benefits

Assets in a Living Trust can legally avoid probate. For both families with young children or adult children, quick access to assets may be necessary. Hence, avoiding probate which can take months or years is often an important goal. While Living Trusts are created before you pass, Testamentary Trusts are created after you pass by a Last Will and Testament. Assets in a Testamentary Trust do not avoid probate.

Trusts can hold assets until certain benchmarks are reached, typically a responsible age. Money (such as a life insurance payout) can be distributed prior to a designated age for reasonable education, health and support needs, as deemed by the Successor Trustees you appoint.

Trusts can maintain a residence for children & their guardians. Mortgages, taxes and expenses can be paid from your Living Trust until children finish school, at which point the property can be sold and distributed.

Trusts can maintain a residence for a spouse in a blended family until he/she no longer resides in the real estate owned by the trust.

A trust can help special needs beneficiaries receiving disability income. An inheritance may interfere with disability payments. A trust can withhold their share until a partial or full distribution is needed.

Married couples can double their estate tax exemption. If your estate (including life ins) is under $2M in 2008 or $3.5M in 2009 there’s little worry for estate taxes. Portions of estates over that limit are subject to hefty taxes of nearly 50%.

Living Trusts are known for easily accommodating unique requests, such as estate planning for pets.

Trusts typically contain No Contest Clauses disinheriting anyone legally contesting the estate, which can freeze an estate for years and increasing the stress on the executor’s job.

To Function, Assets Must Be in Your Living Trust

Your trust can only control assets in its possession. Your goal is to transfer appropriate assets into your Living Trust while you are living. You maintain control of assets in your Living Trust. Assets typically transferred to a trust: Property, bank accounts, vehicles and non-titled assets such as furniture, art, jewelry, etc. Assets not in the trust but naming the trust as a beneficiary: Life insurance, annuities Assets kept away from the trust: Retirement accounts, such as IRA’s and 401k’s. Consult your financial advisor.

Living Trusts in Tennessee

Our attorney is Elan Wurtzel, Esq. and may be viewed on the Tennessee  State Bar website. Your typical Revocable Living Trust package will include the following documents:

• Revocable Living Trust – (A, A-Disclaimer / Bypass Trust, A-B or A-B-C)
• Durable Power of Attorney
• HIPAA Releases for Powers of Attorney
• Last Will and Testament
• Living Will
• One deed to transfer a Tennessee property into your trust

Start today by contacting us for a COMPLIMENTARY CONSULTATION and ESTATE REVIEW