Randall Heiler - Attorney at Law - Randall Heiler - Attorney at Law

Estate Planning

Estate planning is more than just anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate the uncertainties, delay and cost of the probate process and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and authority is granted to others to make decisions during while the client is incapacitated.

Components of an estate plan.  The typical estate plan includes a trust, pour-over will, durable power of attorney, advance medical directive and the documents needed to transfer real property to the trust.

What is a trust?  A trust is similar to a will, though a trust is a more powerful and useful tool.  A will does little for its owner until that person passes away.  At that point, the will becomes our instruction sheet in the probate process.  It is a common misconception that a will avoids probate.  A trust is an instrument that is created and operates while its owner is alive, sometime referred to as a living trust.  It is an entity that holds assets for the trust owner, manages those assets during that person’s lifetime, and then manages and distributes assets after that person passes away.

Trusts aren't just for the wealthy.  A trust can meet several different goals.  The first goal is to avoid probate.  Probate is a legal process that involves filing a deceased person's will with the local probate court, taking an inventory and getting appraisals of the deceased's property, paying taxes and debts, and eventually distributing the remaining assets and property. The probate process is costly and time-consuming.  Probate can start with an estate as small as $100,000. 

Trusts manage assets.  Whether the need is to manage assets for your beneficiary after you are gone, or the need is to manage assets for you during incapacity or illness, a trust is the perfect tool to maintain and use assets in the manner you have chosen.

Trusts minimize taxes.  The exemption from the estate tax was $3.5 million in 2009.  The estates of those who pass in 2010 will have not have the estate tax burden.  Unless Congress passes new laws, the tax will be reinstated in 2011 with a $1 million exemption.  A trust for a married couple can secure a $1 million exemption for each spouse, pushing our exemptions to $2 million.

A pour-over will is a particular type of Will used in conjunction with a Trust. This kind of Will directs any property the deceased still owned at the time of death to the Trust that the person set up during his or her lifetime.

The durable power of attorney is a grant of legal authority to another person which allows that person to make decisions, take care of business and manage assets.  The person receiving the authority is called an agent.  A power of attorney which is durable maintains that authority even after the grantor of the power has become incapacitated.

An advance medical directive is the same concept as the power of attorney, the difference is that the agent is not authorized to manage assets, rather, the agent is authorized to make care and medical decisions for the grantor of the power.  Decisions can include deciding where the grantor is to live, securing and changing medical professionals, securing medical treatment, changing medical treatment and even withdrawing treatment and life-support under special circumstances.