Do I need an estate plan if I have a small estate?
Generally, smaller estates will fare worse than larger ones if a clear estate plan is not created because the cash reserves in the estate may be liquidated needlessly for probate attorneys’ fees and/or estate taxes. Also, small is a relative term so you may think your estate is small; however, the IRS may think differently. With any size estates, it is important to have a clear plan that is simple to execute and avoids lengthy court processes.
Will a Living Trust protect my assets from creditors?
A Living Trust can protect your estate from chaotic events such as probate and disability; however, your creditors may still attach to assets in a revocable living trust. A Living Trust can, if properly drafted, provide asset protection for your beneficiaries and there are other asset protection options to consider if you’re seeking creditor protection.
Will Putting My Family’s Names On All My Assets Be An Effective Estate Plan?
Although joint titling of assets is an option, most of the time it is a bad choice because it exposes your estate assets to the creditors of your family members and once this is done it is difficult to undo in the event of a bankruptcy, divorce or other legal conflict. A revocable trust accomplishes the same goals without the needless risk to your estate.
Can My Spouse Or Children Just Make Decisions For Me?
Although it may seem logical, your family members are not legally empowered to make decisions on your behalf simply because they are family. The proper legal documents such as Durable Powers of Attorney and Medical Directives must be executed in order to allow family members to make legal decisions for you.
Can I Just Give Away My Assets Before I Die?
Although gifting of assets is a planning option, the timing generally does not work so that gifting at the right time becomes a viable strategy. Too often, the estate assets are required for support and gifting away assets will result in inadequate funds to live on. If Medical is involved, there is a look back period for any transfers so a gifting strategy could backfire leaving an individual with no assets to pay for needed long term care and no public benefits. Also, gift tax returns must be filed and if over the limit, a Federal Tax can be levied on gifts.