Do not fail to plan your estate for your family: a scary story

Do not fail to plan your estate for your family.

I have a scary story and you’ll learn the word “escheat.”

About a dozen years ago, another attorney had an estate which had to be probated. There was no Will, no plan, and no reference to any relatives.

Escheat means at the end of that probate estate, the attorney wrote a check. He sent all of the proceeds of the deceased man’s assets to the state. And that was that. Don’t be that person.

Indeed, I have another scary situation: this is called “intestate succession.”

So, if you pass away without an estate plan, and there is nothing to designate to whom your assets go, they will go according to the law of the state. So, according to state law and levels of consanguinity, your assets will be distributed. Your family does not get to express a preference; your assets go according to state law. AND EVEN WORSE: your estate most likely needs to go through probate court to accomplish this.

Now this does not happen that often. And that’s good. But do not be that person. Estate planning is not a complicated matter if you reach out to the right person to take care of it with you. 

You DO care about your legacy.

On the other hand, the effect of failing to plan your estate is as if you said, “I know I worked my whole life. And now I have these things, these accounts, this real estate. But, I don’t really care what happens to it. My loved ones will figure it out.”

Hopefully, they would figure it out. But let’s take care of them, and let’s take care of your legacy. I hope this has not spooked you too much, but some of us might need a little wake-up call, right? Do not fail to plan your estate for your family.

I hope this helps you.

How do I get an Estate Plan … what’s my part in this?

How do I get an estate plan … what is my part in all of this?

It seems like there is a lot to be done. So, how much of it do I need to do? I’m not sure I know how to do this.

I can tell you my approach.

Others may differ, but in over 20 years, I’ve arrived at what I think makes sense for you. And your part? Mostly talking with me and answering questions I am used to asking.

We’ll meet or get on the phone together and discuss:

1) What do your assets look like (home, retirement, stocks, life insurance, small business); and let me tell you a little secret: I do estate plans for real people, most folks don’t have millions of dollars – they have a house, some retirement and some life insurance, sometimes a small business; everyone needs a plan.

2) How would you like those assets used during your life (and for couples, the life of the surviving spouse among you) and who would you like to help you out if you need help in your later years? (Also, note the excellent worth in a Durable Power of Attorney document.)

3) Finally, What do you dream about those assets doing for your family after you are gone? What should be your legacy?

I’ve been doing this for a number of years. In about half an hour, we’ll have the basics of your estate plan.

Then you go back to what it is that you do, and I go to work, thinking through what you want your legacy to look like, and drafting that into the right documents. I may follow up with a few detailed questions or additional ideas that I think you might like. Finally, we’ll review and sign.

In review:

a) We’ll talk. Do not worry. I have lead a lot of these conversations, so you will not have to “carry the ball.”

b) I’ll think and draft. I work, while you go back to life and know that I am on it.

c) I’ll check back with you. I may need a few details, to confirm a preference, or just to ask “how does it look?”

d) You’ll sign. You will come in, since we usually need two witnesses and a notary public.

And that’s that. You can stop worrying, and you can know you have taken care of this important step for your own care and your family. (Yes, this is not something to neglect; think about your estate plan, and talk to your parents about their estate plan.)

I hope this is helpful to you.

I really need an estate plan but isn’t it complicated?

I really need to get an estate plan done, but isn’t it complicated? No, it’s simple. Let’s talk about two basic documents: Durable Power of Attorney; and a Living Trust.

A durable power of attorney is important. And if that is true, it is important NOW. A durable power of attorney document says, “while I’m alive, among other things, if something happens to me that my ability to take care of myself begins to fade, I want to appoint help. I want this person to take care of my finance and business decisions. I want to appoint this person to care for my health needs. If he or she becomes unable to do so, then I name this person as my backup.”

See another video for why a durable power of attorney is important and how the lack of such a document can prove pretty complicated if something happens. See Durable Power of Attorney video.

A Living Trust can do so many things for you, and for the most part, here are the big questions I’ll have for you:

  1. Do you want to preserve your spouse/significant other’s ability to use all Trust assets after your death;
  2. Who should be Trustee after both of you pass away (many people select one of their children, who will be bound by the Trust language for how and to whom assets are used or distributed); and
  3. After both of you have passed away, who should get your assets and how; and YOU CAN DO WHAT YOU LIKE with this, for example:

Pass an asset outright or divided, for instance, our home divided among our children;

Maybe you want to set aside X % or dollars to be divided among children or grandchildren for education;

You can give your grand-daughter what remains after her education fund a percentage at age 22, more at age 25, and remainder at age 30, for example; or

Perhaps you will leave a % or certain amount to a charity in your name. See “How does a Trust even work” video.

It does not take long to talk with you. I will simply learn how you want to leave a legacy for your family. And that is the HARD part for you. Not so hard, really just a conversation. Then I draft the documents and you sign. You will return home with the peace of mind that someone can take care of things when something happens to you, and that you have put a plan in place to fund your life, and your legacy, and to avoid probate once or twice, in the process.

I hope this helps you.

I’m Dan Covington and you can always find me at Estate Plan Kansas.

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Do you know the best thing about a Trust: it can distribute in SO many ways

You know a Trust can avoid probate. You know it can be there for your or your surviving spouse’s needs. But what else is helpful about a Trust? When it comes time for your Trust to distribute assets, you have many options. Your assets do not need to go, for instance, one-half to each child.

A great characteristic of a Trust is how it can distribute in really just about any way you can imagine.

Look at all these ways a Trust can distribute, based upon your wishes:

You can leave a percentage to Timothy at age 21;

To Timothy ⅓ at age 22, another ⅓ and age 25, remainder at 30;

You might leave a percentage to Timothy for post-secondary educational needs, remainder at age 23;

To Timothy in a children’s trust, to help support his needs until age 18, then remainder to Timothy outright;

It may be important to you to leave assets to Timothy in a supplemental special needs trust. The SNT can assist him for life but without disqualifying him from assistance for which he may otherwise qualify;

What else have I seen around:

To Timothy at age 25, provided he can pass a urinalysis test for illegal drugs;

One might leave assets to Timothy so long as he is not co-habitating with Karen for at least 12 consecutive months prior to distribution;

To Timothy as long as he has been employed full time for 12 consecutive months prior to distribution;

Perhaps you would like to leave a sum to Timothy at age 30, to be used as a down payment upon a home;

To Timothy to take care of my beloved border collie, Sam, for Sam’s care for his lifetime;

or you might leave a percentage to Timothy when he marries, to help with the start of his choosing.

There are dozens of other ways you can have your Trust distribute to your family. That’s another part of the brilliance of a Trust as the center of an estate plan. Rather than just a document that distributes assets outright upon your death, it can do so, so many things. It can be there to provide during your life, and for years and years after your life.

I hope this helps you.

How does a Trust work

How Does a Trust Work?

First, you sign a document with basic rules about how your Trust should be managed, administered and distributed.

Next you transfer assets into the Trust (by deed, assignment or similar document).

Then, you live. During your life you can put more property in or take it out of your Trust, and you can use and spend those assets or even just the income off those assets, if you like. And during your life, if something changes or you just change your mind, you can change your Trust.

Flexible and Powerful; after your passing —

  1. The Trustee can manage and distribute assets from your Trust WITHOUT months and thousands of dollars of probate and going through a court of law for administration and supervision;
  2. To be sure, your Trust can pass along all types of assets:
    • Real estate;
    • Accounts and investments;
    • Retirement accounts;
    • Life insurance can fund into your Trust so that the lump sum coming from the insurance policy is managed and distributed according to the rules you put in your Trust;
    • Family business ownership (stock or LLC units of ownership) for planned business succession; and
    • Manage tough-to-divide assets for a time so that they may be enjoyed or income realized for a time before being sold (and perhaps divided then)(vacation cabin, boat, RV, mineral interests)
  3. Of course the Trust assets can be used by your remaining immediate family (and/or others if you like) and provide structured, dependable income to care for day to day AND extraordinary needs;
  4. Finally, Trust assets can be distributed in the way you set forth when you signed the Trust (here are only a few examples):
    • Lump sum
    • For educational needs
    • Portions at age 22, 25, 30 or any ages you choose
    • To a person with special needs to help them out without disqualifying them from other benefits

Yes, a Trust can sound complicated at first, but after all this explanation, What does a Trust do? It works, it works well, and it can do a lot of things efficiently.

I hope this helps you. I’m Dan Covington. You can always find me at Estate Plan Kansas.

Contact me for a free initial consult.