King & Wood, P.A.

Why Do I Need a Will?

“There’s always plenty of time to get your affairs in order, until you get run over by a cement truck.”

Perhaps getting hit by a cement truck is too blunt for some, but unexpected things happen all the time. An estate plan, including a will and other important documents, is good preparation, especially for caregivers of people with special needs. A recent article from Forbes titled “Where There is a Will, There is a Way” explains the steps everyone, especially caregivers, need to follow.

Creating a last will and testament

This is the foundation of an estate plan. Without a will, the court will distribute assets to children equally. If a disabled person receiving government benefits receives an inheritance, they will become ineligible and lose access to services. The court will also assign guardianship to minors or disabled individuals, if there is no will. A will, in tandem with proper estate planning, ensures protection for an individual with special needs, including naming a guardian of your choice.

Having a General Durable Power of Attorney for Finances

A POA allows you to name a person you trust to manage finances, real estate property, investments, or any aspect of your life, if you become incapacitated. A POA should be created for your needs, so you may decide in advance what you do and do not want your agent to be able to do for you.

Creating a Durable Power of Attorney for Healthcare

This important legal document, paired with a HIPAA release form, allows someone of your choice to take charge of your healthcare, talk with healthcare providers and make decisions based on your expressed wishes. You may name more than one person for this role but doing so could make it harder if the two people don’t agree on your care.

Naming a Guardian

This is a critical step if you are a caretaker for a person who will likely be unable to manage their own affairs, even after attaining legal age. By naming a guardian in your will, you can select the people who will be in charge of your special needs family member or minor children. Without a guardian named in your will, the courts will make this decision.

Drafting a “Letter of Intent”

A letter of intent is a guide with important information only you know. It is especially important for caretakers. Explaining in detail your disabled individual’s preferences can make a huge difference in the quality of their lives when you are no longer available. What are their likes and likes, what people do they enjoy spending time with and what foods do they prefer, etc. If your children are minors, this letter is an opportunity to describe your preferences for how they should be raised, including religious preferences, vocational choices and even nighttime rituals.

Providing Financial Security

If your family includes a loved one with Special Needs, you can protect their ability to have funds for things not covered by government benefits through a Special Needs Trust. Your estate planning attorney will create an SNT with a trustee and a secondary trustee to oversee the funds and ensure that they are used for qualified expenses.

How Do Special Needs Trusts Work?

“Special needs trusts can help fund quality-of-life improvements for the beneficiary, such as a phone, a trip or a private room in a group care facility.”

Parents with disabled children worry about how their offspring will manage when parents are no longer able to care for them. Leaving money directly to a child receiving means-tested government benefits, like Social Security Supplemental Income or Medicaid, could make them ineligible for these programs, explains an article from Kiplinger titled “Estate Planning: A Special Trust for a Special Need.” In most states, beneficiaries of either program are only allowed to have a few thousand dollars in assets, with the specific amount varying by state. However, the financial support from government programs only goes so far. Many families opt to have their own family member with special needs live at home, since the benefit amount is rarely enough.

The solution is a Special Needs Trust, which provides financial support for a disabled individual. The SNT owns the assets, not the individual. Therefore, the assets are excluded from asset limit tests. The funds in the trust can be used to enhance quality of life, such as a cell phone, a vacation or a private room in a group living facility. The SNT is a means of making sure that a vulnerable family member receives the money and other relatives, such as a sibling, don’t have a financial burden.

SNTs can only be created for those who are younger than age 65 and are meant for individuals with a mental or physical disability so severe they cannot work and require ongoing support from government agencies. A disabled person who can and does work isn’t eligible to receive government support and isn’t eligible for an SNT, although an estate planning attorney will be able to create a trust for this scenario also.

Each state has its own guidelines for SNTs, with some requiring a verification from a medical professional. There are challenges along the way. A child with autism may grow up to be an adult who can work and hold a job, for instance. However, estate planning attorneys recommend setting up the SNT just in case. If your family member qualifies, it will be there for their benefit. If they do not, it will operate as an ordinary trust and give the person the income according to your instructions.

SNTs require a trustee and successor trustee to be responsible for managing the trust and distributing assets. The beneficiary may not have the ability to direct distributions from the trust. The language of the trust must state explicitly the trustee has sole discretion in making distributions.

Because every state has its own system for administering disability benefits, the estate planning attorney will tailor the trust to meet the state’s requirements. The SNT also must be reported to the state. If the beneficiary moves to another state, the SNT may be subjected to two different sets of laws and the trustee will need to confirm the trust meets both state’s requirements.

SNTs operate as pass-through entities. Tax treatment favors ongoing distributions to beneficiaries. Any earned investment income goes to the beneficiary in the same year, with distributions taxed at the beneficiaries’ income tax rate. Trust assets may be used to pay for the tax bill.

As long as all annual income from the trust is distributed in a given year, the trust will not owe any tax. However, a return must be filed to report income. For any undistributed annual investment income, the trust is taxed at one of four levels of tax rates. These range from 10% and can go as high as 37%, depending on the trust income.

An SNT can be named as the beneficiary of a traditional IRA on the death of the parent. Investments grow tax deferred, as long as they remain in the retirement account and the SNT collects the required minimum distributions for the retirement account each year, with the money passing as income. However, any undistributed amount of the required distribution will be taxed at the trust’s highest tax rate.

Reference: Kiplinger (June 8, 2022) “Estate Planning: A Special Trust for a Special Need”

What Happens to Investment Accounts when Someone Dies?

“What investment powers does a personal representative in a probate or a trustee in a trust administration have to manage the decedent’s assets?”

Taking responsibility for a decedent’s probate or trust estate often involves managing significant amounts of wealth, whether they are brokerage accounts or cash assets. Today’s volatile markets add another level of complexity to this responsibility. The article “Estate Planning: Investments during administration of decedent’s estate” from Lake County News explains what estate administrators, executors and trustees need to know as they take on these tasks.

Investment account values are in a constant state of change and may include assets now considered too risky because they are owned by the estate and not the individual. The administrator will need to evaluate the accounts in light of debts owed by the decedent, the costs in administering the estate and any gifts to be made before the estate will be closed.

At the same time, too much cash on hand could mean unproductive assets earning less than they could, losing value to inflation. If there is a long time between the death of the owner and the date of distribution, depending on markets and interest rates, having too much cash could be detrimental to the beneficiaries.

The personal representative or trustee, as relevant, may determine that the cash should be invested, shift how existing investments are managed, or decide to sell investments to generate cash needed for debts, expenses and distributions to beneficiaries.

A personal representative is not expected or required to be a stock market expert. Their duties are to manage estate assets as a person making prudent decisions for the betterment of the estate and heirs. They must put the interest of the estate above their own and not make any speculative investments. With the exception of checking accounts, the expectation is for estate accounts to earn something, even if it is only interest.

If the personal representative has the authority to do so, they may invest in very low-risk debt assets. If the will includes investment powers and if certain conditions safeguarding payment of the decedent’s debts and expenses are satisfied, the personal representatives may invest using those powers. In some instances, a court order may be needed. An estate planning attorney will be able to advise based on the laws of the state in which the decedent resided.

For a trust, the trustee has a fiduciary duty to invest and manage trust assets for beneficiaries. Assets should be made productive, unless the trust includes specific directions for the use of assets prior to distribution. The longer the trust administration takes and the larger the value of the trust, the more important this becomes.

In all scenarios, investment decisions, including balancing risk and reward, must be made in the context of an overall investment strategy for the benefit of heirs. Investments may be delegated to a professional investment advisor, but the selection of the advisor must be made cautiously. The advisor must be selected prudently and the scope and terms of the selection of the advisor must be consistent with the purposes and terms of the trust. The trustee or executor must personally monitor the advisor’s performance and compliance with the overall strategy.

Reference: Lake County News (June 11, 2022) “Estate Planning: Investments during administration of decedent’s estate”

How Do Estate Plans and Trusts Work?

“In this article, we will address two terms which some people use interchangeably, but which are very different things: living trusts and estate plans.”

There can be some confusion around terms used in estate planning. Unless you are an estate planning attorney yourself, it’s not likely you know all the terminology used. A recent article from The Dallas Morning News explains further in the article “Clearing up confusion: The difference between a living trust and an estate plan.”

Living trusts, sometimes called “revocable living trusts,” or more formally, “inter-vivos trusts” are documents prepared and implemented when a person is living. They commonly include a distribution plan for assets owned in the trust, in contrast to a last will and testament, which only comes into effect when the person has died.

In most cases, the person who has created the trust (the grantor) is also the person to benefit from the trust (the beneficiary) as well as the person who controls and manages the trusts (the trustee). A living trust also makes provisions for the trust to be controlled and managed by a successor trustee, in case the owner is incapacitated. This also prevents the need for guardianship proceedings to gain control of the trustee.

If the person has no family members to care for them in the event of incapacity, the successor trustee may be a bank or other financial institution.

Living trusts are good tools to use for disposition of assets, especially in blended family situations. Trusts are harder to challenge than wills, and unlike wills, they are private documents. When an estate goes through probate, the will becomes part of the public record. As a result, anyone can see its contents.

An estate plan refers to the larger plan, which may or may not contain a living trust. It also includes an analysis of all of your assets and directions for how each will pass to your beneficiaries. Estate planning also addresses tax planning: federal and state estate taxes and inheritance taxes.

An estate plan also plans for incapacity. Preparing financial and medical powers of attorney, HIPAA releases and advance directives allow designated representatives to take care of your business affairs, talk with doctors about your care and know what your wishes are, if end-of-life decisions need to be made.

To be clear, estate planning is the “process” which creates a course of action for the passage of assets and the preparation of documents to facilitate the plan. A living trust is part of an estate plan, but not the only piece of the estate plan.

Some people are confused by the use of the word “estate.” Your estate includes everything you own at the time of death. Assets owned outside of trusts are divided into probate estate and non-probate estate assets. The non-probate estate consists of assets with beneficiary designations, usually life insurance policies, investment accounts, jointly owned assets and any Transfer on Death or Payable on Death accounts.

The probate estate includes assets distributed under the terms of a will. If you don’t have a will, the court will appoint an administrator to distribute your assets according to the laws of your state. There’s no obligation for the court to name a family member as the administrator. Therefore, a complete stranger might be in charge of everything you’ve ever worked for. The better route: speak with an estate planning attorney to create an estate plan and learn if your situation warrants a living trust.

Reference: The Dallas Morning News (May 24, 2022) “Clearing up confusion: The difference between a living trust and an estate plan”

What are Benefits of Putting Money into a Trust?

“Grantor retained annuity trusts, intentionally defective grantor trusts, spousal lifetime access trusts, oh my! If you overhear two estate planning attorneys at a coffee shop, it would not be unreasonable to think that all clients have estate plans filled with trusts.”

For the average person, knowing how a revocable trust, irrevocable trust and testamentary trust work will help you start thinking of how a trust might help achieve your estate planning goals. A recent article from The Street, “3 Powerful Types of Trusts that Can Work for You,” provides a good foundation.

The Revocable Trust is one of the more flexible trusts. The person who creates the trust can change anything about the trust at any time. You may add or remove assets, beneficiaries or sell property owned by the trust. Most people who create these trusts, grantors, name themselves as the trustee, allowing themselves to use their property, even though it is owned in the trust.

A Revocable Trust needs to have a successor trustee to manage the assets in the trust for when the grantor dies or becomes incapacitated. The transfer of ownership of the trust and its assets from the grantor to the successor trustee is a way to protect assets in case of disability.

At death, a revocable trust becomes an Irrevocable Trust, which cannot be easily revoked or changed. The successor trustee follows the instructions in the trust document to manage assets and distribute assets.

The revocable trust provides flexibility. However, assets in a revocable trust are considered part of the taxable estate, which means they are subject to estate taxes (both federal and state) when the owner dies. A revocable trust does not offer any protection against creditors, nor will it shield assets from lawsuits.

If the revocable trust’s owner has any debts or legal settlements when they die, the court could award funds from the value of the trust and beneficiaries will only receive what’s left.

A Testamentary Trust is a trust created in connection with instructions contained in a last will and testament. A good example is a trust for a child outlining when assets will be distributed to them by the trustee and for what purposes the trustee is permitted to make the distribution. Funds in this kind of trust are usually used for health, education, maintenance and supports, often referred to as “HEMS.”

For families with relatively modest estates, a trust can be a valuable tool to protect children’s futures. Assets held in trust for the lifetime of a child are protected in the event of the child’s going through a divorce because the child’s inheritance is not subject to equitable distribution when not comingled.

Many people buy life insurance for their families, but they don’t always know that proceeds from the life insurance policy may be subject to estate taxes. An insurance trust, known as an ILIT (Irrevocable Life Insurance Trust) is a smart way to remove life insurance from your taxable estate.

Whether you can have an ILIT depends on policy ownership at the time of the insured’s death. In most cases, the insurance trust must be the owner and the insurance trust must be named as the beneficiary. If the trust is not drafted before the application for and purchase of the life insurance policy, it may be possible to transfer an existing policy to the trust. However, if this is done after the purchase, there may be some challenges and requirements. The owner must live more than three years after the transfer for the policy proceeds to be removed from the taxable estate.

Trusts may seem complex and overwhelming. However, an estate planning attorney will draft them properly and make sure that they are used appropriately to protect your assets and your family.

Reference: The Street (May 13, 2022) “3 Powerful Types of Trusts that Can Work for You”

What Is the Best Way to Leave Money to Children?

“Providing for future generations shouldn’t be (overly) taxing. To manage taxes as you pass down your assets, look into UTMAs, 529s, child IRAs and trusts.”

Parents and grandparents want what’s best for children and grandchildren. We love generously sharing with them during our lifetimes—family vacations, values and history. If we can, we also want to pass on a financial legacy with little or no complications, explains a recent article titled “4 Tax-Smart Ways to Share the Wealth with Kids” from Kiplinger.

There are many ways to transfer wealth from one person to another. However, there are only a handful of tools to effectively transfer financial gifts for future generations during our lifetimes. UTMA/UGMA accounts, 529 accounts, IRAs, and Irrevocable Gift Trusts are the most widely used.

Which option will be best for you and your family? It depends on how much control you want to have, the goal of your gift and its size.

UTMA/UGMA Accounts, the short version for Uniform Transfers to Minor or Uniform Gift to Minor accounts, allows gifts to be set aside for minors who would otherwise not be allowed to own significant property. These custodial accounts let you designate someone—it could be you—to manage gifted funds, until the child becomes of legal age, depending on where you live, 18 or 21.

It takes very little to set up the account. You can do it with your local bank branch. However, the funds are taxable to the child and if an investment triggers a “kiddie tax,” putting the child into a high tax bracket and in line with income tax brackets for non-grantor trusts, it could become expensive. Your estate planning attorney will help you determine if this makes sense.

What may concern you more: when the minor turns 18 or 21, they own the account and can do whatever they want with the funds.

529 College Savings Accounts are increasingly popular for passing on wealth to the next generation. The main goal of a 529 is for educational purposes. However, there are many qualified expenses that it may be used for. Any income from transfers into the account is free of federal income tax, as long as distributions are used for qualified expenses. Any gains may be nontaxable under local and state laws, depending on which account you open and where you live. Contributions to 529 accounts qualify for the annual gift tax exclusion but can also be used for other gift and estate tax planning methods, including letting you make front-loaded gifts for up to five years without tapping your lifetime estate tax exemption.

You may also change the beneficiary of the account at any time, so if one child doesn’t use all their funds, they can be used by another child.

From the IRS’ perspective, a child’s IRA is the same as an adult IRA. The traditional IRA allows an immediate deduction for income taxes when contributions are made. Neither income nor principal are taxed until funds are withdrawn. By contrast, a Roth IRA has no up-front tax deduction. However, any earned income is tax free, as are withdrawals. There are other considerations and limits.  However, generally speaking the Roth IRA is the preferred approach for children and adults when the income earner expects to be in a higher tax bracket when they retire. It’s safe to say that most younger children with earned income will earn more income in their adult years.

The most versatile way to make gifts to minors is through a trust. There’s no one-size-fits-all trust, and tax rules can be complex. Therefore, trusts should only be created with the help of an experienced estate planning attorney. A trust is a private agreement naming a trustee who will manage the assets in the trust for a beneficiary. The terms can be whatever the grantor (the person creating the trust) wants. Trusts can be designed to be fully asset-protected for a beneficiary’s lifetime, as long as they align with state law. The trust should have a provision for what will occur if the beneficiary or the primary trustee dies before the end of the trust.

Reference: Kiplinger (May 15, 2022) “4 Tax-Smart Ways to Share the Wealth with Kids”

Why Have a Joint Revocable Trust?

“Establishing a joint revocable trust can be an ideal estate planning tool for the benefit of your children, grandchildren and beyond.”

If you’re married, you are eligible to use a joint trust instead of having individual trusts. This recent article, “Joint Revocable Trust: Estate Planning” from aol.com, looks at the pros and cons to see if it makes sense for your estate plan.

A trust is a legal entity where a grantor, the person creating the trust, gives a trustee control over assets in the trust, usually to distribute them when the grantor has died. The person receiving the trust is the beneficiary. They have no control over the assets until they are distributed. In the case of a revocable living trust, the grantor and the trustee are often the same person.

A revocable trust, also known as a revocable living trust, can be changed many times, or even dissolved whenever the grantor wants. However, when the grantor dies or becomes incapacitated, the trust becomes irrevocable, meaning it cannot easily be changed. It also becomes inaccessible to creditors.

Why would you need a “joint” revocable trust? As its name implies, a joint trust has multiple co-trustees. This is a commonly used trust for spouses, especially when the wish is for the surviving spouse to receive 100% of the couple’s assets when the first spouse dies. The joint trust is revocable while both spouses are living and, depending on the trust terms, may continue to be revocable after the first spouse dies.

When one spouse dies, the surviving spouse becomes the sole trustee. On the death of the second spouse, the trust becomes an irrevocable trust. This is when an appointed successor trustee takes control of the trust, including distributing assets to beneficiaries as directed in the trust documents.

To decide whether you and your spouse need a joint revocable trust, you’ll want to discuss the pros and cons with an estate planning attorney.

The joint trust is practical and easy to fund and maintain. You and your spouse can both transfer assets into the same trust and you both own it. Assets in the joint trust don’t go through probate, which can get assets distributed faster and easier. The assets in the joint trust and the terms of the trust remain private, since the trust documents don’t become part of the public record. Your will does, through probate. Finally, a joint trust does not need to file a separate tax return, as long as one spouse is still living.

However, there are some disadvantages to a joint trust. It’s harder to leave any assets in the joint trust to non-spousal beneficiaries, like children from a prior marriage. The surviving spouse retains control over all assets in the trust. If there is no language in the trust concerning children, they will not inherit anything from the trust.

In a small number of states, there are state estate taxes with thresholds far lower than the current federal estate tax exemption of $12.06 million per individual. Your estate planning attorney will know what taxes will be due in your state of residence.

A joint trust may offer less protection from creditors than separate trusts, if one of the spouses has financial issues. If spouses combine their assets in a joint revocable trust, assets in both trusts would be vulnerable to creditors.

For couples whose finances are not overly complex, a joint revocable trust may be a great choice. Your estate planning attorney will be able to look at your entire estate and see what tools will serve you best.

Reference: aol.com (May 2, 2022) “Joint Revocable Trust: Estate Planning”

What Is the Purpose of a Pet Trust?

“Many well-off pet owners have left millions of dollars to their cats, dogs and even chickens—perhaps most notoriously Leona Helmsley, who left US$12 million when she died in 2007 to her white Maltese dog Trouble.”

You don’t have to be a billionaire to want to protect your pets. However, you do need to plan for their well-being, if something happens to you. Since pets are considered property, they can’t inherit money to be used for their care. Instead, as explained in a recent article from Barron’s Penta “Future Returns: Why Fido Needs a Trust” titled owners can create pet trusts to protect them, if something happens to their humans. With close to 70% of American households having pets, pet trusts have now become mainstream.

Owners need to designate a reliable caregiver, just as they would designate a guardian for minor children. If you don’t have family members or friends who love animals, contact a local animal rescue group to learn if they have a life-long care program for animals. Many do, with programs incorporating Charitable Remainder Trusts to cover the cost of the pet’s care.

If you want a friend or relative to care for your pet, make sure they are willing and able to do so.  You should have another person as a back-up, in case something happens to them. Circumstances change, and someone who wants to take care of your pet now may not be able to in future years. How long you need to plan for depends upon the lifespan of your pet.

An experienced estate planning attorney can create a pet trust. Because state law enforces conditional distributions from the trust, the care of your pet can be enforced in court, if necessary. The pet owner names a beneficiary, the caregiver and funds the trust with enough assets to care for the pet.

The pet owner also names a trustee. They are a responsible person who will be in charge of distributing funds and making sure they are used for the pet’s well-being. The trustee also makes sure that the pet is healthy and being properly cared for, following the directions of the trust.

Your estate planning attorney will know what your state’s laws are regarding pet trusts, which varies from state to state. For instance, Pennsylvania requires a pet trust to end when the last pet in the trust dies, while other states may limit the trust’s length to 21 years. For dogs and cats, 21 years is a reasonable period of time. However, for other pets, like birds who can live to 100 years, this won’t be long enough.

You’ll need to fund the trust, making sure that there’s enough money to cover the pet’s needs throughout their lifetime. You may also consider the caregiver’s needs, depending on circumstances. How much is reasonable will depend upon the type of pet and the lifestyle of the caretaker. An apartment dweller caring for an elderly cat will need a different level of resources than a person tasked to care for a young horse.

Some states limit the amount of money in a pet trust and will penalize overfunding. Making sure your pet trust is appropriately funded may limit the likelihood of its being challenged.

Reference: Barron’s Penta (April 18, 2022) “Future Returns: Why Fido Needs a Trust”

What Is a Pour-Over Will?

“A pour-over will can be an important part of a person’s estate planning checklist.”

A pour-over will is a particular kind of will created to work with a trust, with a goal of facilitating the transfer of assets if the person creating the trust (the grantor) has not transferred all of their assets into the trust. This happens more often than you’d think. How do you know if you need a pour-over will? The article “Do you need a pour-over will in your estate plan?” from Bankrate will help prepare you for a discussion with an estate planning attorney.

A pour-over will contains a provision permitting the will to pour-over any residual assets left in the person’s estate into a living trust, which is overseen by a trustee when the grantor has died.

Think of the pour-over will as a safety net for a person who didn’t get around to placing all of their assets into the trust before they died. It is also a good tool to avoid the intestate rules that come into play when someone dies without a valid will. Even if assets were not specifically part of the living trust, they can be moved into the living trust after the death of the grantor.

 

How does the pour-over will work? When the estate plan is created, the grantor may designate certain assets to be titled in the name of a living trust established to own the assets which will pass to designated beneficiaries of the trust after the grantor dies. Assets owned in a trust are outside of the estate and don’t go through probate.

Some assets may not be eligible to be titled directly in a trust, including IRAs or other qualified retirement plans. These pass to heirs by a beneficiary designation. Most assets passing by beneficiary designation are not eligible to be placed in a trust.

In the pour-over will, the grantor states that any assets not previously placed in the trust should be added to the trust upon their death. Assets acquired after the trust was established may be poured over into the trust and receive the same treatment as any assets placed in the trust already.

This sounds like a great solution, especially for a person who doesn’t always get around to every last detail. However, there are some pros and cons.

On the plus side is the creation of a safety net to ensure assets go into the trust, making it easier to protect and distribute assets.

Reducing probate complexity is another plus. If a big asset was not included in the trust, it simply goes into the trust at death.

However, there are some drawbacks. The will still needs to go through probate. The will can be challenged, which is always a factor in any estate. Finally, each state has its own laws regarding pour-over wills. Ask an experienced estate planning attorney if this is an option for you before proceeding.

Reference: Bankrate (April 20, 2022) “Do you need a pour-over will in your estate plan?”

Just What Is in an Estate Plan?

“Unfortunately, death doesn’t just happen to other people. We should all get our affairs in order, so that our loved ones can focus on grieving and moving on once we pass.’

Getting your affairs in order may not be on anyone’s top ten fun list for a weekend. However, once it is done, you can relax, knowing your loved ones will be cared for. Is estate planning more or less painful than doing taxes once a year? The answer depends on who you ask, but a recent article titled “Estate Planning Checklist: 12 Things to Get in Order” from South Florida Reporter breaks it down into easy-to-manage steps.

A last will and testament outlines how your assets will be distributed after your death. They include personal property, real estate, bank accounts, etc. You can name a guardian for minor children, and name an executor, the person who will be in charge of managing your estate.

Proof of identity. Your executor will need information including a valid birth certificate, Social Security card, marriage or divorce certificates, a prenuptial agreement, or military service discharge papers.

Digital asset information. With so much of our lives lived online, everyone needs a digital vault, an integrated password manager or some kind of system for managing your digital assets. Without this, your traditional and digital assets are vulnerable to identity theft and fraud.

Property deeds and titles. You have titles for cars, homes, or real estate property. They need to be gathered and kept in a safe place, then one or two highly trusted individuals need to be told where these documents are located.

Revocable living trust. Creating a trust with an experienced estate planning attorney can help loved ones avoid the time and cost of having your estate go through probate. The trust creates a legal entity allowing you to control property while you are alive but preparing for the future. If you are living and become incapacitated, the successor trustee controls the assets owned by the trust.

Debts. These do not disappear when you die. Your executor will need to know what debts exist because they will need to address them. Compile a list of your debts, which may include mortgages, auto loans, credit cards, personal loans and student loans. Add contact information for the lender, account number, login information and approximate amount of the debt. If you have credit cards you rarely use, include those also, so they can be closed out before identity theft occurs.

Non-Probate Assets and Beneficiaries. Assets with named beneficiary designations can be transferred directly to beneficiaries. However, this does not happen automatically. Your executor will need to provide beneficiaries with the information for the assets, including the name of the insurance company or financial institution, the location of policies, account numbers and the value of the asset. The beneficiary may need to provide a death certificate and identification information before the assets are released.

Financial information. Let your executor skip the scavenger hunt. Create a detailed list information including bank accounts, car insurance, credit cards, health, home and life insurance, pension plans, retirement plans and tax returns.

Advanced Health Care Directive. This document is an opportunity for you to tell health care providers how you want medical decisions to be made, if you cannot communicate your wishes. The AHCD typically has two parts: Health Care Power of Attorney (also known as a health care proxy) and a living will.

The Living Will outlines your wishes, if you are unable to communicate. It describes your preferences for end-of-life requests, medications, resuscitation, surgeries, or other invasive procedures.

Power of Attorney is a document to give someone else the power to act on your behalf regarding financial and legal affairs. The scope of power can be as broad as managing everything or limited to selling your classic car collection. Your estate planning attorney will help you clarify what responsibilities you wish to give in a POA.

Funeral Wishes. If you want to save your family a lot of stress during a very difficult time, outline what you would want to happen. Do you want a cremation or embalming and burial? Should it be a full-on faith-based memorial service, or a few poems read at graveside? Make sure that your wishes are communicated and shared with loved ones, so everyone knows what you want.

Meet with an Estate Planning Attorney. Make an appointment to meet with an estate planning attorney to put all of this information in the appropriate legal documents. They may have recommendations for options that you may not know about.

Reference: South Florida Reporter (April 2, 2022) “Estate Planning Checklist: 12 Things to Get in Order”