Documentation and Funding
Steps One and Two in Estate Planning
Steps One and Two in Estate Planning
While we can also prepare estate plans in other states where we are licensed, such as Pennsylvania, New Jersey, and New York, most of our clients live in Delaware. Almost all estate plans should include Revocable Trusts with part of the objective to avoid the probate process. The main purpose of the trust is to provide a more organized plan of distribution than is possible under a simple Will. The Revocable Trust is also designed to use the federal estate tax credit for those with taxable estates.
A number of documents should be prepared as part of comprehensive estate planning: Revocable Trust, Pour-Over Will, Durable Power of Attorney, Living Will for Health Care, and Guardianship Designations. Foremost among those documents is a Revocable Trust for each spouse. In order to create those Trusts and fund them with the assets in your estate, The Williams Law Firm is here to assist with the drafting your Trust to carry out your intentions. Once executed, we can coach you through the process of funding the Trust from your assets properly to benefit the objects of your affection.
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A Revocable Trust is also known as a Living Trust. For assets that are outside your Trust, at the time of death, any assets over $30,000 or real estate in your name will result in a probate process in New Castle County. The probate process can be cumbersome and expensive, and is avoidable. For example, 2% of your financial assets will be taxed as a fee to the Register of Wills, which can be avoided with careful planning by funding your Trust.
Your Trust documents will benefit yourself followed by your loved ones. Typically, your spouse then children. You will name a successor trustee which is usually a spouse. Your spouse would then manage the assets for his or her benefit while alive. Then, after the death of the surviving spouse another successor should be named to manage Trust assets for the benefit of minor children, relatives, or friends before the assets are distributed at specified ages, such as one-third at age 25, half of the remaining assets at age 30 with the balance distributed at age 35. Assets can also be held in Special Needs Trusts for people not able to manage their own finances. We can provide specific bequests and fractional bequests to honor your intentions. We can also provide for beneficiaries which are charities or pets.
We have clients of all ages and backgrounds. We also help with planning for people with non-traditional families. The clients we help range from widows to young couples and LGBTQ+ families. Usually, a Trust is the right solution for most clients whether they are retired, early in their earning years, executives, doctors, farmers, or teachers.
Preparing the Trust properly ensures your beneficiaries are not left with any unwanted surprises when you are gone, and The Williams Law Firm can assist with this document. Once the document is satisfactory, we will prepare the Trust in triplicate with one office copy, one for home reference, and another for safekeeping. Then, you can sign it in our office where we have it witnessed and notarized. Should you change your intentions, we can help you prepare amended and restated Trust agreements in the future.
Loading up the basket
The second step to estate planning is funding the trust after it is signed. While we also prepare a Pour-Over Will that funds your trust upon your death, that requires probate to fund your Trust.
It is preferable to have a Revocable Trust during your life that is funded. Funding your Trust completes the estate planning process. You must formally transfer your assets to the Trust, change beneficiary designation on certain insurance and retirement accounts, and without taking this step your Trust does not avoid probate fees. Not all attorneys handle the funding, which can leave important assets subject to probate, but The Williams Law Firm suggests we help you with this as part of our approach to estate planning. Our paralegal can coach you or we can do the transfers ourselves.
Some assets have titles or deeds that must be transferred to the Trust. These usually include:
Other assets, such as artwork, jewelry, and heirlooms, may not have title documents. For those we prepare an assignment of tangibles that assigns them to the trust. Additionally, there is a schedule in the back of the Trust document where you can provide a handwritten list after the Trust is executed should you wish to provide specific bequests of these tangibles to beneficiaries in particular.
Keeping your assets out of probate
After your intentions are documented in the Trust, proper documents and funding are essential to ensuring the Trust is established as it should be.
– Martin Luther King, Jr.