Makes sure your estate goes to whom you want, when you want, the way you want. Most estate plans leave the assets to the next generation outright (i.e., in their hands) in equal shares. However, with a little bit of thought on your part, and some guidance from an experienced elder law estate planning attorney, you may dramatically improve the way your estate is ultimately distributed. For example, you may delay large bequests until children or grandchildren are older or give it to them in stages so that they have the chance to make some mistakes with the money without jeopardizing the whole inheritance. Similarly, you may place conditions on receipt of money such as “only upon graduation with a bachelor’s degree” or “only to be used to purchase an annuity to provide a lifetime income for the beneficiary”. The possibilities, of course, are endless.
Allows you to give back to the people and places that have helped you. Again, most people leave their assets to their children in equal shares. Yet time and again we see children who really don’t need the money or, unfortunately, don’t deserve it. Even when they do need and deserve it, there is a place for remembering those people and institutions who have helped make you what you are today.
It proves stewardship by showing your family that you cared enough to plan for them. When you put time, thought and effort into planning your affairs it sends a powerful message to your loved ones. You are saying that you handled the matter with care and diligence. This will reflect itself in how the money is received, invested and spent by your heirs.
Saves your heirs legal fees, taxes and time in settling your affairs. Everyone understands and wants to save fees and taxes, but what about saving time? By planning ahead with trusts instead of wills, you may abbreviate the settlement process, thus aiding the grieving process by allowing families to heal more quickly and get on with their lives. In addition, while assets are tied up in an estate proceeding, valuable investment opportunities may be lost or additional expenses incurred, such as having to maintain a home.
Protects your assets from being eaten up by long-term care costs. No estate plan is complete without a plan to protect it from having to “spend down” your assets if you need care at home or a nursing home. If you don’t qualify for long-term care insurance, due to medical or economic reasons, you should consider setting up trusts to protect your assets from long-term care costs.
Allows you to protect the inheritance from children’s divorces, lawsuits and creditors. With middle class people often leaving hundreds of thousands of dollars to their children, doesn’t it make sense to protect the inheritance from the high rate of divorce? By leaving assets to your children in an Inheritance Protection Trust, you may not only protect them from a divorce but, in many cases, also from creditors in the event your son or daughter ever gets sued.
Makes sure your estate will pass by blood instead of by marriage. Most estate plans leave the money to the children. So let’s say that you have left $250,000 to your son and $250,000 to your daughter. Now if they die (remember this is after you’re gone) who inherits from them? In many cases it’s your son-in-law or daughter-in-law. Can they get remarried and share your $250,000 with a complete stranger? Sure. Happens all the time. By leaving your assets in a trust for your children, you can give them complete control over their inheritance (so you’re not “ruling from the grave”) while at the same time providing that, when they die, whatever they didn’t spend goes to your grandchildren.
Guarantees you will be protected if you become disabled. An ever-increasing percentage of people today have a period of disability before they die. Without a plan, you risk getting the state’s plan where they appoint a legal guardian for you who (1) may be a stranger (2) may change your investments (3) may be unable to protect your assets if you need long-term care, and (4) may make it difficult to get back control of your assets if you recover from your disability. When you set up a living trust, you avoid a guardianship proceeding, put the persons you choose in control and allow them to transfer and protect assets.
New York Estate Planning & Elder Law Blog
