Although it can be unpleasant to think about estate planning, it is beneficial to have a plan in place early, prior to becoming sick or passing away. Doing this sort of planning while you are healthy can ensure that you focus your best efforts on the choices that will impact your future.
Wills are the legal documents that enable you to manage what will happen with your assets upon your death. Wills assign an individual to handle the settling of your affairs upon your death, and can be used to designate guardian for minor children or other dependents.
Trusts are a legal arrangement that assigns designated assets to the beneficiaries you choose. A Living Trust enables you to manage your assets for the benefit of a beneficiary while you are alive, and gives directions for someone to take over the responsibility of managing your assets when you become incapacitated. Living Trusts outline how your assets should be distributed upon your death, and can be used to avoid the probate process.
Probate is the legal process of accounting for a person’s assets, using those assets to pay creditors, and distribute the remaining assets to those entitled to receive it. A person who dies with a valid Will is said to have died testate, and the distribution of the deceased assets is made pursuant to the Will. A person who dies without a Will is said to have died intestate, and the distribution of their assets is made pursuant to the intestacy law of the state. The probate process is overseen by the Court system, and the proper type of probate administration is helpful to ensure the probate process is completed without incident.
Trusts can be helpful in avoiding the probate process. Under a Trust, the distribution of the deceased assets is overseen by a trustee. Trust Administration can usually be accomplished without court involvement, because the trustee take on the responsibility and liability of being in charge of the distribution of the assets of the deceased. Trustees are fiduciaries to the deceased, which means they have the the highest duty of care under the law. Trustees and Personal Representatives of an estate should retain legal counsel to help in the trust administration process.
Special Needs Trusts help those with disabilities or injuries who need public assistance benefits. Special Needs Trusts are typically used to manage resources designated to benefit the injured or disabled person, while enabling them to remain eligible for public assistance benefits. Under a Special Needs Trust, beneficiaries may retain family inheritance and legal settlements, such as personal injury, without disqualifying them from Supplemental Security Income or Medicaid benefits.