Should I Try to Avoid Probate?

“Probate” is the word used to describe the administration of a person’s estate, which can be a long, complex and sometimes expensive procedure.  In some states probate is a relatively short and inexpensive process, but you should ask a professional adviser about your own situation.  If probate does appear to be a problem, several strategies are available:

  • You may be able to reduce your probate estate to qualify for “small estate” treatment that will shorten probate or avoid it completely.  Many financial arrangements – retirement plans, CDs, savings and brokerage accounts, for example – can pass outside probate by means of beneficiary designations.

  • You could transfer most of your assets to a revocable living trust (see below).

Where practical, you can reduce your probate estate by making lifetime gifts to your beneficiaries, rather than leaving them assets at death.  Note:  Friends who “accelerate bequests” for our benefit can enjoy income tax savings and the satisfaction of seeing their generosity at work right now.

 


 

What Are the Differences between Wills and Trusts?

A will is the traditional way for people to direct who will receive their assets after death.  Through a skillfully drafted will, your attorney can minimize any taxes and other costs that may be payable at your death.  Your will can also name an executor (personal representative) of your own choice to carry out the directions in your will and help your family with any of the special problems (business or personal) that may arise after your death.

A carefully prepared will can also include a trust that provides practical security for beneficiaries who may not be qualified to manage and budget their inheritance.  Trusts are arrangements in which assets are titled in the name of a trustee, who manages the trust assets and pays income to individuals named by you.  Your beneficiaries will have all the rewards and advantages of property ownership, but with none of its burdens and frustrations. 

The revocable living trust can be an effective estate planning tool for many people, providing privacy for one’s estate, financial management in times of disability, distribution of assets at death and reduced probate costs.  Ownership of your assets will be changed over to the trust, but you would keep the right to change or revoke the trust during your lifetime.

Your will or revocable living trust may also be the best way for you to arrange to make a thoughtful bequest to provide for our future.  In a well-planned will, the cost of such a bequest can be surprisingly modest.  Please call our office for more information about wills and estate planning and the simplicity of including us in your plans.

 



Questions to Ask Before Retaining an Estate Planning Attorney

  • How much of their practice is devoted to estate planning and probate work?

  • Can the attorney put you in touch with two or more satisfied clients? 

  • If you own real estate in another state, is the attorney licensed to practice there?

  • If you are younger than the attorney, how might legal assistance be provided to settle your estate or trust if you outlive him or her?

 



Who Sets Up Charitable Gift Annuities?

A survey by the American Council on Gift Annuities offers a profile of the typical gift annuity donor:

  • More than 90% of immediate payment annuitants are age 70 or older at the time of the gift;

  • Women annuitants outnumber men 56% to 44%;

  • Most gift annuities make payments for one life (72.4%); the rest are two-life arrangements (27.6%);

  • The average amount used to fund a gift annuity was $43,371, generally in cash, with securities being the funding asset in other cases.

While the survey did not track the motivations of gift annuity donors, reasons given for establishing gift annuities usually include:

  • Desire to help the charitable organization;

  • Financial security of fixed payments for life;

  • Payments are partly tax-free return of principal;

  • Charitable deductions;

  • Minimized capital gains taxes (with gifts of appreciated securities).

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The materials contained on this website are intended only to show some ways by which you can make a charitable gift or bequest and thereby minimize federal tax liabilities, as authorized by the Internal Revenue Code. All examples are of a general nature only and should not be applied to your specific situation without first consulting your attorney or other advisers.