FOUR COMMON QUESTIONS IN ESTATE PLANNING

1.  What’s the difference between a Living Trust and a Will?

A will is simple to create and relatively inexpensive

A trust takes more time to create and will be more expensive to set up than just a will.

The main advantage of a trust is that unlike a will, a trust can avoid the court’s involvement or probate.   For estates over $100,000, probate by the court is required.  Probate fees authorized by law are $13,000 for a $500,000 estate.

A trust has another distinct advantage as it can make full use of tax exemptions for a husband and wife.

Finally, a trust maintains privacy and is flexible.

2.  Is it better to use an attorney than a “do it yourself” software?

When it comes to a living trust or revocable trust, one could easily spend a good amount of time learning and understanding the nuances and options that trusts offer.  It is analogous to a homeowners doing simple projects on their own or hiring licensed contractors to handle more complex jobs.

The knowledge and experience of a qualified attorney would most certainly be an advantage in preparing comprehensive estate planning documents with the least amount of wasted time and effort.  You want to be sure that when the trust and estate planning documents are needed, that they will work.

3.  What are things I should watch out for?

First, you should consult an attorney that you are comfortable with regarding your estate planning documents.  The services offered and price vary widely.

Second, ask if the attorney will prepare the documents needed to fund the trust.  The process of transferring  assets to a trust is called ‘funding the trust.”  Firms that offer excellent service generally prepare a grant deed so that your home will be properly transferred into the trust.  You should also ask the attorney charges extra for recording and notary fees.

4. I’ve been wanting to get one done, but I’m really busy.

Procrastination especially in the area of mortality is common.

Saving money and avoiding taxes should be something no one wants to procrastinate.

An estate plan package generally takes about 3-5 hours of your time to complete, and can be done in two appointments.  In my opinion, the time and expense invested to insure that your family is taken care of is minimal.