Trusts & Estates:
Creating an Estate Plan can seem like a daunting task—it is uncomfortable to make plans for your own death, and it can seem overwhelming to address every aspect and plan for every contingency. However, once a plan is in place, it should be a relief to know your goals are protected. And with the guidance of an Estate Planning Attorney, the process is less intimidating. Regardless of the size, value, or complexity of your Estate, you should have an Estate Plan. Proper planning ensures that your wishes are accurately honored and your property passes to the individuals and organizations of your choice.

Where to Begin with the CONTRACT Trust

1. Start by listing all of your assets. It may help to think in terms of categories: real property, investment property, business ownership interests, IRA accounts, bank accounts, life insurance policies, annuities, etc. This list will help your Attorney or adviser determine the total value of your Estate and any tax implications that may exist.
 
2. Gather beneficiary designations. Some accounts like IRAs, life insurance policies, annuities, or bank accounts pass upon your death not by your Estate Plan, but by a designated beneficiary listed specifically for that asset. It is particularly important to review these designations when creating or changing your Estate Plan to ensure your assets pass according to your wishes.
 
3. Know generally what your goals are and who you want to leave property to. List the goals you want to accomplish in your Estate Plan. A common pitfall is getting bogged down trying to assign a beneficiary to every single asset. Instead think about the big picture, then your Attorney will help you piece together the assets to the beneficiaries in a way that will minimize tax consequences and fulfill your goals.
 
4. Consider who you want to serve as Executor. The Executor is the person or entity responsible for carrying out the directions of your Will. Serving as someone’s Executor can be both an honor and a burden. You may select an individual—such as a family member—or a Corporate Executor. You may also select Co-Executors to serve jointly.

Understanding Trusts

A Trust is a legal document that is used in Estate planning. Generally speaking, Trusts can usually be divided into two categories: Revocable and Irrevocable.
 
Revocable Trusts. A Revocable Trust is, as the name indicates, revocable. It can be changed, altered, amended, or revoked altogether by the creator (Grantor) of the Trust. A Revocable Trust usually provides the Trustee with three instructions:
 
  1. What happens to your property while you are alive?
  2. What happens to your property should you become incapacitated?
  3. What happens to your property at your death?
 
Irrevocable Trusts. In contrast to a Revocable Trust, an Irrevocable Trust cannot be amended.
 
  1. These usually arise in one of two situations:
  2. The Grantor of a Revocable Trust has become incapacitated or has died.
  3. The Grantor has put property into a Trust for the benefit of another, such as a spouse, children, charity, etc.
 
Combinations. Many people utilize combinations of Revocable Trusts, Irrevocable Trusts, and Wills in their Estate Plans.
 
  • Trust in a Will: Often, Wills include provisions creating Trusts.
  • Will and a Trust: Even if you choose to set up a Revocable Living Trust, your Estate Plan will likely still include a Will called a “pour-over” Will.
  • Trust in a Trust: A Revocable Living Trust may contain provisions that create one or more Trusts for the property at the Grantor’s death.
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