Estate Planning Frequently Asked Questions

Why do I need a Will?

You need a will to specify who you want to receive the assets in your estate, and to provide for the management of any such assets that may be inherited by a minor, disabled individual, or anyone else who may not be able to handle substantial sums of money.  You also need a will to designate the person you would like to administer your estate (who is referred to as an executor or a personal representative), and the person you would like to act as guardian of any minor children.

Do I need a lawyer to write a Will?

In order to be valid, the person making the will must be legally competent, and the will must comply with strict state laws regarding the manner in which the will is signed and witnessed.  If the court does not recognize the will as being valid, your assets will be distributed as if you died without a will.  It can thus be highly risky to try to write and execute a Will without the assistance of a knowledgeable lawyer.

Can I leave assets to a minor in my Will?

Although you can leave assets to a minor in your will, minors are not legally authorized to manage assets they inherit and thus the court will strictly oversee the management and distribution of any inheritance left directly to a minor until the minor reaches age 18.   The best way to provide for minors, or any other person who is unable to properly manage his/her financial affairs, in your will is thus to create a trust for that person’s benefit in your will.  You can direct in your will that upon your death some or all of your assets are to be distributed to a trust for the benefit of the person. You can name a trustee in your will to manage the trust assets, and can authorize the trustee to spend the trust assets for the benefit of the beneficiary to ensure the beneficiary’s needs are being met.  Additionally, the trust does not have to end when the minor reaches 18, but rather you can specify any age which must be reached, or any event which must happen before the assets in the trust are fully released to the beneficiary.

Can I select a guardian for my minor children in my Will?

If a minor does not have a living parent capable of acting as guardian, the court will always appoint a guardian for the minor based on what it determines is in the best interests of the minor.  In your will, however, you can tell the court who you think would be the best guardian for a minor child of yours if you were not alive, and the court will strongly consider your wishes in deciding who to appoint as guardian, unless it felt honoring your wishes were not in the best interests of your child.  Although you can designate spouses to act as co-guardians of your minor children, it is not a requirement that both a husband and wife be named as guardians.  Also, although you may choose the same individual to act as both guardian of your minor children and trustee of a trust for their benefit, you can name different individuals for these two positions if you feel doing so would be best for your children.  Finally it is a good idea to designate an alternate guardian in your will in case your first choice for guardian is unable or unwilling to act as guardian for any reason.

What does an executor do?

An executor, also referred to as a personal representative, is the person that will handle the distribution of your estate on your behalf, make sure the terms of your will are satisfied and take care of your debts and expenses.  The job involves a significant amount of work and requires honesty, integrity and diligence.  A personal representative, as well as an alternate personal representative, should be designated in your will.

What is a trust?

A trust is a legal agreement in which one person, known as the trustee, holds property for the benefit of another person(s), known as the beneficiary.  The trustee is authorized to distribute or use the trust property to benefit the trust beneficiary in accordance with the terms of a written trust agreement.  The terms of the trust can be quite simple or very complicated and lengthy.

A person who wants to create a trust can either create one in his or her will which will only come into effect after the creator’s death, which is called a “testamentary trust”, or can create one that goes into effect while he or she is alive, which is called a “living” trust.  Additionally, a person who creates a living trust can either retain the right to change the trust agreement and the assets owned by it after it has been created, which is called a “revocable” trust, or they can give up any right to change the trust in any way after it has been created, which is called an “irrevocable” trust.  An irrevocable trust, in which essentially all control over the trust is relinquished, is sometimes used as an asset protection planning device.

Who should I select as trustee?

A major decision when setting up a trust is the selection of the trustee.  The best planned trust can fail to achieve your goals if the trustee doesn’t carry out the trust terms and duties properly.  Some important attributes to look for when choosing a trustee are:

  • Knowledge about Investments: The trustee must be able to make decisions regarding trust investments that are in keeping with the goals of the trust.
  • Familiarity with Taxes: Taxes go hand in hand with investments.  Terms such as taxable, tax exempt, capital gains and losses, fiduciary income tax and deductions all have special significance for a trust.  The trustee must also be aware of the beneficiary’s individual tax situation so that the beneficiary’s income tax liability can be minimized.
  • Sympathetic Concern: The trustee’s relationship with the beneficiary should be amicable in a business sense.  There must be tact and understanding, and some firmness, to carry out the goals of the trust.  The trustee must also be able to show impartiality when there are multiple beneficiaries.
  • Record-Keeping Ability: A trustee must account for every transaction.  Beneficiaries should be kept fully informed and meticulous records are essential.
  • Continuity:  A trustee should be someone who has a health life expectancy and can be depended upon year after year.  A beneficiary needs a trustee who is reliable, and replacing a trustee is not always a simple task.
What is a durable power of attorney?

A durable power of attorney is a document which allows you to give another person the authority to perform certain transaction on your behalf, including banking, signing contracts and/or selling real estate. This power should only be given to someone whom you trust implicitly. The durable power of attorney is an invaluable tool for those who become unable to manage their own affairs. Regardless of your age, if you become incapacitated or mentally impaired for any length of time and do not have a durable power of attorney, someone will have to undertake the difficult and expensive process of petitioning the court for the appointment of a guardian to manage your property and personal affairs.

What is a health care proxy?

A health care proxy is a document in which you designate a specific individual who can communicate your health care wishes to your doctors in the event you are incompetent or unable to communicate your wishes yourself due to an accident or illness. The agent you appoint may refuse life sustaining treatment on your behalf and may communicate your wishes regarding artificial hydration and nutrition. It is very important to let your agent know your wishes about health care decisions so that he/she will be able to communicate your wishes for you accurately if the need ever arises. Additionally, it is a good idea to designate an alternate agent in case the first person you designate is unable or unwilling to act as your agent for any reason.

What is a living will?

A living will is a written statement in which you can tell your doctors your specific wishes regarding medical treatment. Living wills are commonly used as a means to inform doctors of your wishes regarding life sustaining treatment, such as artificial nutrition and hydration, in the event of a serious terminal illness.

How often should I update my estate plan?

You should review your estate plan every 3-5 years to ensure it still reflects your desires. Additionally, you should review your estate plan any time there has been an important change in your life such as:

  • birth, death, marriage, divorce or disability of you or a beneficiary
  • large increase or decrease in the net worth or you or a beneficiary
  • a substantial change in the type of your assets
  • the purchase or sale of a business
  • change of residence to a new state or country
  • change in federal or state law you believe may impact your estate plan
What should I do if I would like to meet with an attorney to discuss my estate plan?

If you would like to meet with us to discuss your estate plan, please either contact us directly, or download and print one of our Confidential Estate Planning Worksheets, complete it as best you can and return it to us.  We will contact you to schedule an appointment after receiving your completed Worksheet.