The 7 P’s of Estate Planning #7 – Peace of Mind

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The 7 P’s of Estate Planning #6 – Plan

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Understanding Special Needs Trusts Video

An Understanding of special needs trusts is important for those people in your life that need protection. Special needs trusts help protect special people.

Hi, I’m Gary DeWitt, Estate Planning Attorney in Northwest Arkansas.

 

Understanding Special Needs Trusts: Major Types

Special needs trusts come in many different types that fulfill different purposes.

For your understanding, you need to know that special needs trusts come in 2 major types.

Understanding Special Needs Trusts: First Person Trust

The first is the “first person” special needs trust.  This is a trust setup for a person’s own money.  For example, if somebody that is on benefits got hurt in a car accident and received a large lump sum settlement, a “first person” special needs trust would be used.  This type of trust has one major drawback; Medicaid gets the first opportunity to get paid out of the trust at the person’s death.  You may sometimes hear these referred to as the pooled trust or a d(4)(a) trust.

Understanding Special Needs Trusts: Third Person Trust

The second is the “third person” special needs trust.  This type of trust holds money that never belongs to the person with special needs. So, if mom and dad have life insurance, they can have it paid into a third party special needs trust.  Because the money is only used for the person’s benefit, but doesn’t ever belong to them, the person putting the money into can leave further instructions.

More Information

 

Feel free to call with your questions or to get my free book, “Secrets of Excellent Estate Planning”. The book is also available on my website. 

I will show you how to protect what you have today, and what you leave your kids tomorrow.  You’ll be able to take advantage of my estate planning legal strategies without you or your loved ones having to deal with Probate Courts, long delays, and death tax.

 

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The 7 P’s of Estate Planning #5 – Protection

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What is the Difference Between Trustee and Guardian?

The difference between trustee and guardian is immense.  It is like comparing apples and zebras.

Guardian

A guardian, in this context, is a person appointed by a court and Judge in a guardianship proceeding to make another person’s (the ward) legal, financial, and healthcare decisions.

The guardian is then responsible for managing the ward’s financial, healthcare, and legal affairs. The guardian is responsible to the Judge in the case. The guardian must report to the Judge annually on the social, emotional, and physical status of the ward. The guardian must also prepare and present an account of the ward’s estate annually. This account is published, typically in a newspaper, and must be approved by the Judge. A guardian may also be required to have a bond (insurance) in order to serve. Guardianship is expensive and can be embarrassing for the ward.

Trustee

A trustee is the person in charge of managing the assets in a trust for the benefit of the beneficiaries. A trustee has no legal authority to manage the legal, financial, or healthcare affairs for the person who created the trust.

A trust is an agreement between two people for the benefit of a third person. Those two people are the grantor (the person creating the trust and putting property into the trust) and the trustee. The trustee has actual legal ownership of the assets but manages them for the benefit of a third person – the beneficiary.

Summary

In summary, a guardian is appointed by a Judge to manage all the ward’s affairs under court supervision. A trustee manages the assets in the trust, but has no control of the affairs of the person.

As you can see the difference between a trustee and guardian is immense and is like comparing oranges to horses. They are completely different and have different purposes.

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Estate Planning Client Profile #142 – Married Couple With Minor Children

They are a couple with minor children. They want to provide for their children and make sure they provide their nominations for guardians if something should happen to them while their children are still minors.

We created a trust based plan that included the following:

• Trust
• Pour Over Wills
• Financial and Legal Affairs Durable Powers of Attorney
• Healthcare Powers of Attorney
• Living Wills
• Quit Claim Deed

The Trust enables their property to avoid probate and to be managed for their children’s benefit.

The Wills name the people they want as their personal representative of their final estate and give the personal representative the authority to transfer assets to the trust if the couple missed anything during their lifetime.

The Durable Powers of Attorney name the people the couple wants to manage their financial and legal affairs during their lifetime if they can’t.

The Healthcare Powers of Attorney name the people to manage their healthcare if they can’t.

The Living Will (Advance Directive) includes the treatments they want or don’t want if they terminally ill or permanently unconscious.

The quit claim deeds move their real estate into the Trust so it avoids Probate.

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The 7 P’s of Estate Planning #4 – Probate

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7 P’s of Estate Planning #3 – Privacy

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Checking Beneficiary Designations

I’m sitting here on my birthday and am reminded of advice I give my clients.

This advice is so important you should mark it on your calendar.  On the day after your birthday, write an entry on your calendar to check your beneficiary designations, payable on death beneficiaries, and beneficiary deeds.

There has been more than one ex-spouse or otherwise disowned child that is happily surprised when they get a life insurance check they didn’t expect.  They only get the check because the owner of the life insurance, retirement account, annuity, etc. never changed the beneficiary on the account. 

It is very important that you keep up with, and check on, your beneficiary designations.  Paperwork can get lost resulting in the changes you wanted not getting made.

It is also important that you keep a list of accounts and beneficiaries in your estate planning folder or notebook.  Otherwise your spouse and children may be forced to wait for account statements to arrive to know what you had, where you had it, and then have to deal with the company to find out who you wanted it to go to.

The point of all of this is to say check your beneficiary designations regularly and keep a list of them for your family later

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The 7 P’s of Estate Planning #2 – People

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Estate Planning Definition Redux

The part that people get right is that estate planning is about distributing your property to others.  That definition misses many important things a plan also does.

Estate planning also includes

• Nominating guardians for minor children
• Naming an executor
• Making healthcare choices now instead of making family guess later
• Naming somebody to manage your financial, legal, and healthcare affairs if you can’t
• Planning for mental incapacity
• Tax planning
• Taking care of children with special needs
• Taking care of children with addictions to alcohol, drugs, or anything else
• Protecting children from their creditors
• Protecting children from their spouses

Estate planning is as much about protecting you and your family during your lifetime as it is about anything else.

It is essential that you have a durable power of attorney and a healthcare power of attorney in addition to a Will or Trust.  If you don’t then your lifetime protection is limited.

So, let’s define estate planning as the process of creating instructions on handling affairs and assets in case of mental disability, legal incapacity, or when you pass.

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Best Time to Estate Plan

We all feel like tomorrow will always come.  You always have a date to procrastinate to.  And, while that makes you feel good today, it also creates tremendous stress because you KNOW in your heart that you are not making a good choice.

The best time to plan is now.  But why?

If you lose capacity to make decisions, you can no longer sign some or all the documents in an estate plan.

If you can’t understand and don’t have the capacity to sign a contract, you can’t sign a durable power of attorney, healthcare power of attorney, or living will.

If you lose the capacity to understand what you own and who you want to give it to, you can’t sign a last will and testament or trust.

None of us can predict when that moment will come.  Auto accidents, medications, major medical incidents, and accidents around the home can make us unable to make those decisions anymore.  Your life can change, literally, in the blink of an eye.

The best time to plan is now, before anything happens.

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Stop Putting Your Kids on Your Deeds

I’ve coached quite a lot of people on the dangers of putting children on their deeds.  There are better ways for them to get the land or house without putting them on the deed now.

The first problem is capital gains tax.  If you put children on the deed, then you have made a gift of part of the ownership to them.  They are supposed to pay capital gains tax.  But they don’t pay it based on the day of the gift.  They owe it based on the price you paid.

The second problem is that you are exposing your land or house to their creditors, the IRS, and any lawsuit judgment that they may get against them.

The third problem is if you need Medicaid within 5 years of putting them on the deed, it is considered a gift and you may face a Medicaid penalty.

Instead of putting them on the deed, if you need somebody to have control of the property in case of your incapacity, create a durable power of attorney.

If you want them to have the property but are scared that it will have to go through Probate, you have ways to do that.

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How Does Divorce Affect my Estate Plan?

I had a previous planning client come in after her divorce and ask if her plan needed updating.  She had a will and powers of attorney.  My first answer was it depends on if your plan has language about divorce built into it.

And that is the answer, if you plan has contingencies for divorce built in, then you probably don’t need to update it.  If it doesn’t then most of it will need to be updated.

In general, powers of attorney are not affected by divorce unless they have language built in.

In general, trusts aren’t affected by a divorce unless they have language built in.

But, in Arkansas, gifts to an ex left in a Will are nullified by law.  But, if they are named as executor, then unless the Will has divorce language built in, they will be the executor.

Beneficiary designations, beneficiary deeds, pay on death, and transfer on death are not changed by a divorce.  All too often, an ex gets the payout from a life insurance policy because somebody forgot to change the beneficiary.

In general, it is best to have your documents reviewed after a divorce to make sure your ex is completely out of the picture.

By the way, the client that came in had language in both the Will and Powers of Attorney that automatically removed the ex.

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A Living Will is not a Will

Your Will, or Last Will and Testament, expresses your wishes as to

1. The disposition and distribution of your final estate
2. Who should raise your minor children
3. Who should oversee the Probate process

A Living Will, also called an Advance Directive, expresses your healthcare wishes as to your final hours.  The operative language is terminally ill or permanently unconscious with no hope of recovery.  In a Living Will, you make the choices about what treatments you would want or not want if there is no hope of recovery.  In other words, do you want the plug pulled or not.

A Living Will is a very important document to have as often different family members will have different opinions as to what you would want.  With this document in place, the doctors know what you want and don’t have to listen to conflicting stories from family.

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What Happens When You Don’t Have a Will?

If you don’t have a Will, your final estate is subject to what is called administration.  It is much like Probate only who gets how much has already been determined by state law.

Without a Will, the state, not you, decides who gets how much.  When is decided by whether of not the family quarrels.  But it will take at least 8 months to get done.  And it will cost your family at least 6% of the estate to get it done.

Every step of the administration process will happen under the scrutiny of a Judge for correctness.  A Judge must approve every decision. If even one family member objects, then the entire process could take years and lose the estate a lot of money.

First, your spouse only gets a portion of your estate.  In Arkansas, your spouse gets 1/3^rd of personal property, that is everything that isn’t real estate.  You children split the other 2/3rds evenly between them.  If they can’t agree on what property they will each take, then the court will order everything sold and the money split.

Your spouse gets an interest in the real estate called a fractional life estate.  This means she can live there and collect rents and royalties for the remainder of life.  However, your spouse can’t sell the property without your children’s permission.  Then your spouse only gets part of the money from the sale. The children get the property as tenants in common after your spouse passes.

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A Will and a Living Will are not the Same Thing

Your Will, or Last Will and Testament, expresses your wishes as to

1. The disposition and distribution of your final estate
2. Who should raise your minor children
3. Who should be in charge of the Probate process

A Living Will, also called an Advance Directive, expresses your healthcare wishes as to your final hours.  The operative language is terminally ill or permanently unconscious with no hope of recovery.  In a Living Will, you make the choices about what treatments you would want or not want if there is no hope of recovery.  In other words, do you want the plug pulled or not.

A Living Will is a very important document to have as often different family members will have different opinions as to what you would want.  With this document in place, the doctors know what you want and don’t have to listen to conflicting stories from family.

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If a Will Won’t Prevent Probate, What Does?

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What a Will Does Well and What it Fails at

What does a Will do well?

What does a Will fail to do at all?

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What Does Estate Planning do for Me and My Family?

In less than 6 minutes, learn what estate planning does for you and your family by watching this video.

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The 7 P’s of Estate Planning #1 – Property

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How to Avoid the #1 Estate Planning Mistake

How do I avoid the #1 Estate Planning Mistake?

If you make this one mistake, you are exposing yourself and your money to the danger of full control by the government.

The government will decide who manages your affairs; how they are managed; and how your property is handled and distributed.

We all feel like tomorrow will always come. You always have a date to procrastinate and put things off to.

And, while that makes you feel good today, it also creates tremendous stress because you KNOW in your heart that you are not making a good choice.

You keep putting planning off because of the feeling that tomorrow will always come.

But the reality is that tomorrow might not come.

Thankfully, there is good news.

Planning that’s simple, easy to understand, and takes little effort on your part because the hard work has been done for you.

Planning is the difference between living a stress free life and worrying about what is to come.

Procrastination is the #1 mistake.

You can avoid the #1 mistake by starting your plan today.

Feel free to call or text me at (479)717-6300 with questions.

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Putting off Estate Planning

Hi, I’m Gary DeWitt.  I own DeWitt Law Firm where I do estate planning and probate and do it well.

We all feel like tomorrow will always come.  But, what if?

Talk to me, get questions answered, or get estate planning help at your free meeting.  Visit www.planwithgary.com to setup a time for your free meeting.  That’s planwithgary.com.

We all feel like tomorrow will always come.  You always have a date to procrastinate and put things off to. 

And, while that makes you feel good today, it also creates tremendous stress because you KNOW in your heart that you are not making a good choice. 

You keep putting planning off because of the feeling that tomorrow will always come.

But the reality is that tomorrow might not come.

Thankfully, there is good news.  Planning that’s simple, easy to understand, and takes little effort on your part because I’ve done the hard work for you. 

Planning that’s the difference between living a better, stress free life and worrying about what is to come. 

Talk to me, get questions answered, or get estate planning help at your free meeting.  Visit www.planwithgary.com to setup a time for your free meeting.  That’s planwithgary.com.

Thanks for watching.

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What can a Dog Teach About Estate Planning?

The other night, an unexpected thunderstorm popped up.  The next thing I know, I have a shaking, scared dog name Bill laying in my lap.

Like Bill, Probate and incapacity can be scary for your family if you don’t have a plan for both.  There are legal hassles to work through if you aren’t able to make sound, rational choices anymore.  There are legal hassles to work through if the unspeakable happens.

I believe everyone over the age of 18 should have at least a durable power of attorney for finances, legal matters, and healthcare in case of mental incapacity.  This not only protects them, but also keep their family out of court getting permission to manage their affairs.

I believe everyone with a family should have a succession and distribution plan.

I want to make it a reality that everybody is protected against the red tape of court and probate.

I am an estate planning attorney at DeWitt Law Firm.  I would be happy to talk to you about preventing probate and protecting yourself and your family.

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3 Reasons Your Estate Plan Will Fail

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Estate Planning Mistake #8 – Not Knowing how Assets Will Pass to Your Family

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Do I Have to Pay my Parent’s Debts Out of My Pocket?

Hi, I’m Gary DeWitt.  I own DeWitt Law Firm where I do estate planning and probate.

Am I responsible for estate debts?

Talk to me, get questions answered, or get estate planning help at your free meeting.  Visit PlanWithGary.com to setup a time for your free meeting.  That’s PlanWithGary.com.

People often ask if they will be responsible for mom or dad’s debts.  The answer is, as usual for a lawyer, it depends.

If you co-signed or signed as the responsible party, then yes, they are responsible for the debt.

However, if you didn’t co-sign or sign as the responsible party, you are not responsible for your parent’s debt.  And for the most part, the credit companies and collections agencies know this and that they are to be paid from the estate, not out of your pocket.

Once in a while, you will run into somebody that doesn’t know the rules and tries to strong arm you into paying your parent’s debt

Talk to me, get questions answered, or get estate planning help at your free meeting.  Visit planwithgary.com to setup a time for your free meeting.  That’s planwithgary.com.

Thanks for watching.

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Estate Planning Mistake #7 – Thinking that Probate is a Necessary Thing

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One Thing You Need to Understand About Estate Planning

There is one thing you need to understand about Estate Planning more than anything else!

If you don’t create your own estate plan, you are subject to the default, expensive, generic, public, estate plan the government has already written for you!

What Happens in Case of Mental Incapacity?

Mental incapacity happens for a variety of reasons – medications, accidents, dementia, or major medical incidents.  All of these can lead to not being able to make rational, informed decisions.

When you become unable to manage your own legal, business, or healthcare matters (mental incapacity), hopefully somebody you want and trust steps up. 

That person will have to go to court and get a guardianship.  A guardianship allows them limited power to manage basic affairs.  All too many decisions, like selling real estate or other stuff, require the Judge’s approval.  And, if nobody steps up, then Adult Protective Services may get involved, putting you under full government control.

A guardianship is as expensive or more expensive than a complete estate plan. 

Your life is literally controlled by the court and is in the public record.

Estate Distribution

Your final estate is subject to the State’s default distribution plan. Most people don’t like the terms and conditions of this plan.  Again, it must be under a Judge’s Supervision. 

Probate is under the court’s control, not your family’s control.

The State’s default plan is call intestate succession.  In other words, if you don’t create a Will or Trust, the state has created one for you.  Even when the wishes are known, they are ignored, and the law applies.

Probate is

• Public
• Expensive
• Time Consuming
• Emotionally Trying and Tiring
• Controlled by the Court, not Your Family

Here are the highlights (in Arkansas):

• Spouse gets 1/3rd of the personal property like furniture and cash
• Spouse gets a 1/3rd life estate in real estate
• Children get 2/3rds outright which can destroy access to government benefits like Medicaid or SSI
• Children over 18 get their distribution in hand.  They can squander it as them please.
• Children under 18 get their money in a court supervised trust.  Then when they turn 18, the money is paid to them.
• Every step of the process requires a Judge’s signature.

Choices

Given the choice, and the choice is yours, would you rather be in control or let the court be in control? Would you rather these affairs be handled privately by your family or publicly by a court? Do you want to control who gets what, when, and how much? And for your young children, if you have any, do you want a say in who raises them and controls their money?

Two Ways to Get Started Today

1. Call (479)717-6300 anytime to schedule your no cost first appointment
2. Go to http://www.PlanWithGary.com

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Estate Planning Attorney

A good estate planning lawyer helps you not only create an estate plan, but coaches you on financial matters and refers you to other professionals as needed.

Estate Planning Lawyer Helps You Gain Peace of Mind

The attorney will help you create an estate plan to protect you, your family, and your money during your lifetime and beyond. They also help protect your privacy. When you finish your plan, you will gain a new peace of mind you didn’t have before.

What Do They Do?

An estate planning attorney coaches and drafts documents.

The documents they may draft for you include:

• Last Will and Testament
• Revocable Living Trust
• Supplemental Needs Trust
• Irrevocable Trust
• Life Insurance Trusts
• Durable Power of Attorney
• Healthcare Power of Attorney
• Advance Directive (Living Will – Not to be confused with a Last Will and Testament)
• HIPAA Waiver (Protected Healthcare Information Release)

In addition to drafting documents, they can and should coach you on the following:

• Payable on Death for accounts at the bank
• Beneficiary designations for life insurance, retirement accounts, and investment accounts
• Transfer on Death for automobile titles
• Beneficiary Deeds
• and more…

What Happens if I Don’t Plan?

If you don’t write an estate plan, the state has written one for you. It is your default estate plan. Under that plan, you don’t get many choices.

If you become unable to manage your affairs (incapacitated), hopefully somebody you wanted and trust will step up and go to court to get a guardianship. With a guardianship, and under a Judge’s supervision, they can manage your basic financial, legal, and healthcare decisions. However, there are some things, like selling real estate, that require the Judge’s permission. And, if nobody steps up, Adult Protective Services may step in and take over, putting you under full government control.

After you pass, your final estate is subject to the State’s default distribution plan. Most people don’t like the terms and conditions of that plan. Again, it has to be under a Judge’s strict scrutiny.

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Will Lawyer

A Will Lawyer helps you write your Last Will and Testament among other things.

A Will Lawyer is Usually an Estate Planning Attorney

Estate planning attorneys help with much more than just writing a Last Will and testament. A Will is just the “down payment on probate.” A Will requires probate to be validated and activated. Wills provide no lifetime protection.

Most of all, the attorney should focus on helping you and your family gain peace of mind.

1. Estate planning attorneys help coach you and create documents to protect your affairs during your lifetime while providing privacy for your private family business. This usually takes the form of a Durable Power of Attorney, Healthcare Power of Attorney, and Advance Directive.
2. The lawyer coaches you on how to avoid probate. There are many tools available to help you avoid Probate.
   • Revocable Living Trusts
   • Irrevocable Trusts
   • Payable on Death
   • Transfer on Death
   • Title on Death
   • Beneficiary Deeds
   • and more

What is a Will?

A Last Will and Testament accomplishes 3 things

1. Names your executor or executrix (personal representative)
2. Names the person you want as a guardian for your minor children
3. Lists the final gifts you want made

Also, a Will can create a trust. For example, if you leave something to somebody under 18 years old, then you can put language in the Will to create a trust to hold their money.

The remainder of the trust lists out the powers your personal representative shall have. Depending on what powers are listed in the Will, your personal representative may have to make several trips to court. It is permissible in Arkansas to proceed under the authority granted in the Will.

Is a Hand Written Will Valid in Arkansas

So long as the Will is

• Completely in your writing
• Doesn’t leave out any children (even disinherited children must be mentioned), and
• Is properly signed and witnessed

a hand written will is valid in Arkansas.

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Probate Attorney Fayetteville

Probate Attorney Fayetteville Arkansas can help you settle your loved one’s estate with a minimum of hassles.

What Does a Probate Attorney Do?

A probate attorney works with the executor, administrator, or personal representative throughout the probate process.

A probate attorney works with the creditors. They send a notice of probate to all of the known creditors and advertise in the paper for other creditors, both secured and unsecured, to put in their demands. The attorney then works with the creditors to negotiate a settlement. If there are not enough assets in the estate to cover all the outstanding debts each unsecured creditor will get a part of the remaining estate. The unsecured creditors only get paid after the cost of the funeral and attorney fees are paid. If there is nothing left after that, then the unsecured creditors will get nothing.

The Probate Process

Probate either starts by admitting the will and naming the Executor/Executrix or by starting estate administration and appointing an Administrator/Administratrix (all of which are now called a personal representative). The personal representative is responsible for running the probate process. Usually, the personal representative hires and probate attorney Fayetteville Arkansas to help with the probate. Typically, the attorney does all the paperwork at the right times and has the personal representative sign as necessary.

The rest of the process consists of advertising in the newspaper; finding all the heirs; getting waivers signed and filed; gathering up and protecting estate assets; paying creditors; paying final expenses; and finally distributing the estate to the heirs and devisees (devisee is a fancy word for people you left specific gifts to in the Last Will and Testament). Finally, after the property is distributed according to the Will or law, receipts are provided to the court and the case is closed after the report of final distribution.

Over 96% of all probates are not challenged and proceed from start to finish without any issue.

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Trust Lawyers Near Me

Are you looking for trust lawyers near me? Look no further.

Why Should I Hire Trust Lawyers Near Me?

A trust lawyer can help you setup a trust to protect your family and assets without risking losing control of your private affairs and money (to the government); probate; guardianship; family fighting; and much more.

Why a Trust?

It’s not all about just passing things like money and property to your spouse and children. Their inheritance is a gift of your lifetime of hard work and your struggles. It is the hope that by giving them something, they can avoid those struggles and have it easier than your did. By creating a plan now, you can protect your gifts of love from other people, the government, and their struggles yet to come. For inheritance, you need a plan to protect their gift to let your children achieve their own greatness and reduce their struggles to let them achieve that greatness. Yet a plan that allows them the advantage of an inheritance without squandering their sudden windfall. That is what a trust is meant to do.

• Protect their inheritance against divorce, creditors, and more
• Avoid Probate/Save time, anguish, and money
• Prevent family fights over stuff
• You want to say when, how, and how much each family member gets
• You have a blended family and want to pass your wealth to your side of the family

How do I Know I Need a Trust Attorney?

If you are creating a trust, you need to have it either created by and attorney familiar with Trusts or reviewed by an attorney familiar with Trusts. Trusts are complex legal documents with long term consequences if not done correctly. A good Trust attorney has spent years of education and experience learning what to do and not to do. They have done the hard work for you.

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EPIC Estate Planning

EPIC Estate Planning – You are going to have your financial affairs in order. You, your stuff, and your loved ones are going to be protected. You, personally, are going to feel good. Your stress will be relieved because you know that you’ve taken care of your family and estate. Gain peace of mind and have confidence that you and your family are protected.

Today You’ll Discover EPIC Estate Planning

• How to control who gets what, when, and how without Probate
• How to protect yourself and your stuff during your lifetime
• How to avoid costly, devastating planning mistakes

This is for you if you are…

• Curious about planning
• Know that planning is important, but don’t know where to start or what to do
• Frustrated with the thought of putting your family through probate
• Worried about the future and security of you, your spouse, your family, or your money
• Concerned about who will help you when you need help the most
• Want to know what’s in a plan and why
• And many more reasons

Magic Wand

Imagine you could wave a magic wand to control who will get what, when and how without probate; protect yourself, your family and your assets during your lifetime and beyond; and avoid catastrophic, expensive mistakes?

How would that make you feel?  How much peace of mind and confidence would you gain? 

Why should you listen to me?

Let me ask, if you don’t do anything, in six months will you still be worrying about this?  Will you be frustrated because you haven’t gotten around to it?  Will you be disappointed because you’re not protecting you, your family, and your money like you should?

That’s what I’m going to show you how to do today.

When I was 40 years old, my dad passed away unexpectedly.  Mom and I had to struggle through the rigors of probate.  Neither of us had even done this and were lost, confused, and worried for the entire time it took.  Dad had a little money in a lot of places, and we had to find it all.  We had to find all the property, catalog it, inventory it, and then distribute it.  All of this had to be done under the oversight of a Judge and the attorney.

And the attorney was billing us for every minute of time…

Then later that same year, I was hospitalized with chest pain.  It wasn’t a heart attack, but it made me take a good long look at my life.  And while I was laying there in the hospital bed, I was worried about the future of my family.  I was worried about both their financial security and their personal future.  I was also worried about who would make my decisions if I took a turn for the worse.

So, laying there in the hospital, I knew there had to be a better way to do things.  So, I made up my mind then and there to go to law school, become a lawyer, and help people avoid probate and worry less about their future, their family, and their money.

And that is just what I did.  I went to law school at 40 years old, learned as much about estate planning and elder law as I could, and opened my practice to help you get peace of mind.

Furthermore, I completed an advanced law degree in estate planning and elder law to better help people.

After finishing, I knew how to help people avoid probate, control their destiny, and get peace of mind.

I wanted to help people, but they were afraid if they called, I would send a bill.  So, I decided to practice in a different way.

I decided to find a new way of working with clients to plan for their future so when they needed me, they wouldn’t have to worry about getting a bill.  Now clients can call me whenever they need to.

Now, I work with people like you every day to protect them, their family, and their assets so they can get peace of mind knowing that they have taken care of everything they can take care of.  And they don’t have to worry about calling later with questions because I’m not going to start the clock to create a bill…

That’s why I created EPIC estate planning.  It’s different.  To start with, we guarantee our quoted fee.  No matter how much time we put into your plan, the fee won’t change.  We also guarantee your meeting to start on time.  If it doesn’t start within 15 minutes of your scheduled time, I’ll give you $50.

I love this place. Top shelf legal help for wills, estates, trusts, etc. They are hard working, approachable, caring people with their client’s best interests in mind.”

Today, I’m going to cover

1.How to manage your stuff so that it goes to who you want, when you want, and how you want without government interference or oversight avoiding the costly, time consuming, complex, expensive, emotional process of probate

2.How to protect you, your family, and your stuff during your lifetime and beyond

3.How to avoid devastating and costly planning mistakes

Three important things to keep in mind

First, if you do nothing, the government and legislature has already decided what goes to who, when and how.  It will happen under a Judge’s strict oversight and may require multiple trips to court.  This is called probate.  Probate is an unnecessary, public evil.

Second, Wills alone don’t prevent probate.  Wills require probate to be validated and activated.  Probate requires laws created by the legislature and enforced by impersonal judges.  Probate is public, complex, expensive, and inefficient at passing property.  Wills are created just for Probate and require Probate.  Some lawyers call having just a will your down payment on probate.

Third, wills provide no lifetime protection.  Lifetime protection comes from planning with things other than trusts.  If you become incapacitated, even temporarily, during your lifetime, your family may be forced to go to court, often multiple times, to get permission – a guardianship – to make decisions and manage your affairs.  Guardianship is often embarrassing and is always public.

Wills

Wills do three things in general.  A Will is really nothing more than a list of instructions on how to pass your property to the next generation and nominating somebody to care for minor children. It also names somebody to oversee taking the document through court, the executor, to manage the property until it’s final distribution. A Will names who you want to raise your minor children.

A Will controls who gets what, but not when and not how.  It may end up that everything is sold and the money split. 

A Will alone does not prevent probate or a Judge’s involvement and oversight.  A Will requires Probate to be validated and activated.  A Will plus some additional planning will prevent probate for your major property, leaving only the little stuff.  Arkansas has a way to pass small probate estates without the need to go to court in most cases.

However, the rules around the small estate are strict.  The major reason they can’t be used is that you owe final medical expenses or credit card debt.

You can be very detailed in the instructions, or you can be very terse.  I’ve seen Wills from 1 page to 40 pages depending on how detailed they were.

Wills require Probate to be validated and for the property to be passed out.  That’s rights, Wills require Probate.  Wills are just the instructions to the Probate court.

Keep this in mind, a Will can create a Trust.  This is called a testamentary trust and they have their place in planning.

A Will does nothing during your lifetime to protect you, your money, or your rights.

In order to avoid most probate with a Will, you need additional planning.  The goal is to get as much of your estate passed outside of probate as possible and use the Will as a catch all for anything else.  Your Will should just cover the little stuff, if there is anything at all left outside probate.  Your major property should be setup to pass outside of Probate.

Bill’s Will

Bill thought that just a Will would prevent Probate.  But just a Will doesn’t prevent probate as Bill’s family discovered when they tried to sell his house.  Instead of being a smooth, quick transition, Bill’s family had to go through the expense, time, and hassles of Probate to get the house sold and estate settled.

If Bill had done some additional planning, then his family could have avoided probate to sell the house, saving time, money, and emotional turmoil.

Trust

Before explaining what a trust is, I need to define a few terms.

The person creating the trust is called the trustor or grantor.  Grantor simply means they granted property to the trust. 

The person who legally owns the property and manages it is called the Trustee.

The person who gets the benefit of the property is the beneficiary.

A trust is a contract between two people (the trustor and trustee) for the benefit of a third person (the beneficiary)

A living trust is created during your lifetime.  A testamentary trust is created in a Will.

The most common type of trust used in estate planning is the revocable living trust.  Revocable means that it can be changed during your lifetime.  Living means you set it up now.  With the trust you are usually the trustor, trustee, and beneficiary during your lifetime.  However, if you should become incapable of managing the Trust property, you can name somebody else to step in and manage the trust property, your successor trustee.

The trust owns your property and you control the trust completely.  Therefore, you control the property.

When you pass, the trust usually becomes irrevocable and its instructions are carried out by the Trustee you name without Probate.

The advantages of a trust is the trust property is managed during your lifetime and probate is avoided for all property in the trust.

Trusts in Arkansas are not required to pay your final expenses, which can save your heirs literally $100,000’s in final medical bills.

Trusts give what you want to who you want in the amounts you want when you want under the rules you create.

Trusts provide some lifetime protection without a Judge’s oversight.  Trusts usually have a backup trustee to manage the assets in the trust.  But that trustee can only manage Trust assets, not your other affairs or healthcare matters.

Trusts do not require probate.

This picture can help understand what a trust is better.  A trust is really nothing more than a contract between the grantor and trustee for the benefit of a third person, the beneficiary.

The grantor transfers assets to the trustee.  The trustee manages the assets for the benefit of the beneficiary.

The most common trust to prevent probate and manage assets is the revocable living trust.  With that trust, while you are capable, you are the grantor, trustee, and beneficiary.  The trust (trustee) owns the property, and you control the trust.  Therefore, you control the property in the trust.

A trust gives you the ability to decide who gets what, when, and how.  For example, you can pay out the money in the trust at ages 30, 35 and 40 but pay for college.  You can pay for rent, utilities, and food for a child with an addiction.

Trusts give you the best chance of avoiding all probate and leaving the property to your children without having to pay final medical expenses or worry about other debts.

Payable on Death

You can go to the bank and name the people you want to receive the money.  This is called payable on death or POD.

However, the money is an outright gift.  If the person is under 18, then either the bank will hold the money in trust until they are 18, or the court will order a trust to hold the money until they are 18.  If they are 18 or over, then the money will be given directly to them without any safeguards or limits.  They are free to squander it as they please.

POD provides no lifetime protection.

POD prevents probate.

Beneficiary Designations

For many investment accounts, retirement plans, and life insurance, you can setup a beneficiary to receive the money, avoiding probate.  It’s an easy way to give money outright to family without probate.

But the money is an outright gift.  If the person is under 18, then either the company will hold the money in trust until they are 18, or the court will order a trust to hold the money until they are 18.  If they are 18 or over, then the money will be given directly to them without any safeguards or limits.  They are free to squander it as they please.

Beneficiary designations avoid probate.

Beneficiary designations don’t provide any lifetime protection for you.

Transfer on Death Title

You can go to the department of motor vehicles and name the people you want to receive your vehicles.  This is called transfer on death or TOD.

TOD has some rules: •Only 1 person can be named •No more than 3 owners of the vehicle •The owner must be an individual, not a business •You can’t have any liens against the vehicle

If you meet these requirements, then you can fill out the TOD paperwork and take it to the DMV along with your current title.  Don’t sign it until you get there.  At least at my local DMV office, they want to watch you sign.

TOD prevents probate.

TOD provides no lifetime protection.

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Estate Planning is About More Than Who Gets What and When

Hi, I’m Gary DeWitt with DeWitt Law Firm where I do estate planning.

A lot of people come to me and think that estate planning is just about who gets what. They often don’t know that estate planning is about more than who gets what when. Today I’m going to cover what estate planning really is.

Estate planning is about staying in control instead of letting a Judge and the Government make your personal, financial, legal, and healthcare decisions.

Your assets during your lifetime. If you can’t conduct business or manage your own affairs, the court, not your family and you, determine how your assets are used to care for you through a process called guardianship.  Guardianship means that somebody must step up and ask the court to manage your affairs. And they don’t get unlimited authority.  They must report to the court every year about your wellbeing and finances.

How your property is distributed to your family and loved ones.  If you don’t plan, then the State has determined who gets how much and when.  The problem, they haven’t said who gets what.  Your stuff may end up being sold and the cash distributed.  The other problem is that the State also determines how much your spouse gets and how much your children split.

Your dignity.  If you don’t have a plan, the State and doctors have a plan for managing your final hours.  If you can’t make decisions, they’ll make them for you.

Given a choice – and the choice is yours – wouldn’t you like these issues handled by your family in private instead of being drug through the courts?  Wouldn’t you rather control who gets what, how much, and when?  Wouldn’t you rather go out with dignity on your terms?

Knowing that you have a plan in place – one that puts you firmly in control – will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for your family and loved ones.

In summary, estate planning is about staying in control and providing you and your family with peace of mind.

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Probate Lawyer Fayetteville AR

When you want to find probate lawyer Fayetteville, AR, there are some questions you should be asking…

Does the Probate Lawyer Fayetteville AR Have Experience in Probate?

Experience in Probate, to the exclusion of other areas of law, is important. Probate is a large and important area of law. It is too important to rely on a general practice attorney for your planning. Many attorneys say that they do probate, but you will find that they are relying on old forms they haven’t updated in years.

Probate of Estates

Probate is the legal process that happens after a person passes away. It is the transfer of assets from a decedent to the entitled people (heirs), and wraps up the decedent’s financial affairs.

Last Will and Testament

A Last Will and Testament requires probate to be valid and to pass your property onto your heirs and other devisees.

A Last Will and Testament is the legal document that states your wishes for the passing on of your property. A Last Will and Testament names an executor to make sure your wishes are followed, and leaves instructions for how to give away your property (both real estate and other property).

What About Classes and Education?

Lawyers might not even have any recent classes or training in updates to Probate, Trust, and Will law. It’s important to find an attorney that keeps up on the advances and changes in Trust and Will law. Good estate planning attorneys belong to one or more professional organizations that keep them up on the changes in the law and educate them on new advances in the law. Look for membership in WealthCounsel or other organizations that show the attorney cares about their area of the law.

What Questions Should I Ask the Attorney?

How long has the attorney near me been practicing? Do they mainly practice estate planning and Trusts? Do they carry liability and professional insurance? Is this just one of many practice areas, or do they stick to a core set of practice areas such as Trusts, estate planning, probate, and elder law? Do they have real life experience, i.e. have they been through it themselves?

Where do I Find Probate Lawyer Fayetteville AR?

You can look on the internet and in the yellow pages. The best thing is to ask for referrals from friends, family, and allied professionals such as CPAs and attorneys that practice in other areas of the law. These are the best ways to find your Probate attorney. Don’t forget that you should take the time to “interview” your attorney before signing with them.

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Is the Tax on Estates Gone?

The tax on estates is not gone.  Estate tax is alive and well.

The Federal estate tax went away in 2010 (for only one year) and Arkansas estate tax was tied to it.  So in 2010, Arkansas estate tax went away.  The Arkansas legislature hasn’t made a move to bring it back, yet.

The Federal estate tax was brought back in 2011.  But the limits were set much higher and tied to inflation.

As of 2019, an individual can leave up to $11,400,000 ($11.4 million) before estate tax starts.  A couple, if the elect to use the portability provision, can leave up to $22,800,000 before estate tax starts.  If estate tax does kick in, the tax starts at 40%.

The gift tax is tightly coupled to the tax on estates.  For every dollar you give away in your lifetime, it reduces the final estate tax limit dollar for dollar.  So, if you give away $1,000,000 in your lifetime, it would reduce the exemption on the estate to $10,400,000 (down from $11,400,000). 

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Estate Planning for Minor Children

If you want to control your children’s inheritance, you need to do so now.

If you want to choose who will raise your children, you need to choose now.

If you want to choose who will manage your legal,  financial, and personal affairs if incapacity strikes, you need to now.

If you want to choose who will manage your healthcare if incapacity strikes, you need to choose now.

If you want to choose dignity, you need to choose now.

And, you need to wrap it all up in a legally effective plan.

What happens if you don’t have an estate plan?

• A Judge will decide who will raise your children without your input or considering your wishes.  Potentially family and friends could fight over the custody arrangements decided by the Judge.  In the worst case, your children may end up in Foster Care whether temporarily or permanently.
• A Judge will decide who manages your assets (for your and your children’s benefit) without your input or considering your wishes.
• A Judge will decide who will control your children’s inheritance.  Again, without your input.  Your minor children can’t inherit directly. Family and friends may fight over who controls the money.
• You children will get their inheritance at 18 or 21 years of age, without control or conditions.

Create a Will.  In you Will you can list the people you want to raise your children if you can’t.  You can also use a Will to create a Trust to manage their inheritance and name who will manage it.

However, Wills don’t provide any lifetime protection.  Wills only take affect after a person passes away.

Create a Power of Attorney.  Incapacity strikes without warning.  Accidents, and emergency medical incidents often occur without warning and leave parents incapacitated or worse.  You can also name somebody to temporarily take care of your children until you are better.

Consider setting up a Revocable Living Trust. With a revocable living trust, you decide how the inheritance is handled, who manages it, and when your children can have their inheritance and under what conditions.  And, none of the assets in the trust must go through Probate or have a Judge decide their fate.

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Estate Planning Mistake #5 – Failure to Know How Much You’re Worth

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