ESTATE PLANNING:

Don't put your trust in money, put your money in trust. Oliver Wendell Holmes, (1841 - 1935). This sound advice is still true for many. The average person can protect their hard-earned assets from excessive taxes, swindlers, wasteful heirs, gov't agencies, publicity, and probate court entanglements. You can protect your assets during life and take care of your loved ones for a long time after you are gone - if you plan now. Comprehensive estate planning is not just for the rich. Everyone should have tailored documents ready when disruptive events occur during life and after death.

COMPREHENSIVE ESTATE PLANS FOR EVERY SITUATION

Each person's estate and goals are different; therefore, each person needs a tailored estate plan. For many people, a good estate plan consists of a simple will with durable powers of attorney for health care and finance. Others with more complicated situations may also need to define and fund multiple trusts. Finally, those with substantial assets and exposure to liability may require multiple components and business succession planning. Some estate plan components are listed here:​

• Will: Directs your assets after you are gone.
  

• Pour Over Will: Will clauses designating trusts for asset protection upon death.

• Powers of Attorney for Health & Finance: Protects body and assets during life.

• Testamentary Trust: A trust activated when you die.

• Intervivos Trust: A trust active during your life (can be revocable or irrevocable).

• A-B Trust: Formula based trust protects your estate beyond tax exemption limits.

• Spendthrift Trust: Protects your assets after death from wasteful heirs.

• Discretionary Trust: Allows Trustee(s) to "sprinkle" principle and/or income assets.

• Revocable Trust: Protects assets while allowing you to retain control over them.

• Irrevocable Trust: Protects (i.e., from government) but you give up some control.

• Special Needs Trust: Protects from government pgm's while caring for someone.

• Life Insurance Trust: Protects against excessive estate taxes.

• Educational Trust: Allows the Trustmaker to provide for education of others.

• Charitable Trust: Avoids excessive taxation through contributions to charity.

• Pre-and Post-Nuptial Agreements: Protects spouses upon divorce.

What's better, a trust or a will?

What's the difference between a will and a trust, and what should you have? The answer depends on your circumstances. The majority of my clients can accomplish their estate planning objectives by having three relatively inexpensive documents professionally prepared: (1) a will, (2) a durable power of attorney for health care (medical directive), and (3) a durable power of attorney for finance. The will determines what happens to your property after death. The durable powers determine what happens to your body and property while you are still alive but incapacitated (remember the Terri Shiavo controversy). Each document must be customized for each situation.

Every adult should have a will, medical directive, and durable power of attorney for finance. A revocable living trust is an optional document that provides at least the following advantages: (1) privacy of non-public documents, (2) avoidance of probate, (3) tax avoidance for larger estates, and (4) care of special needs beneficiaries while protecting against government reimbursement for Medicaid and other expenses.

Many high-pressure trust mills solicit business from the elderly by claiming they must have a trust to avoid probate. But probate is not necessarily a problem. So, be careful before unnecessarily spending on a trust. And many people end up with purposeless naked trusts because they don't fund them. Funding a trust means to transfer property into a trust's name (houses, bank accounts, cars, etc).

So, do you need a will or a trust? The answer is that you always need a will, medical directive, and durable power of attorney for finance. Trusts are additional optional documents that are a good idea for many people, depending on family and financial situations.