WILLS, TRUSTS, PROBATE
Every now and then I get a phone call and am asked, what do you charge for a simple will? First of all, there is no such thing as a simple will. During my years of practice, I can think of at least 5 – 6 major pieces of legislation that have affected estate planning.
Last will and testament
Depending upon what survey you read, only 31% to 35% of Americans have a will. But the figure should be 100% for, if you do not have a will, the State of Kansas has one for you and you will not like it. A properly drafted estate plan can protect you, your finances, and save your loved ones the time and expense caused from managing your affairs in the event of death, disease or disability.
Whether you are single or married, you should consider such estate planning documentation, including but not limited, to the following:
Last will and testament
Personal property memorandum
Revocable living trust
General durable power of attorney for financial matters
Health care durable power of attorney
Personal health care plan
Child care plan
Funeral and burial instructions
Transfer on death deeds
Payable on death designations
Here is some additional information that might be helpful:
What happens if I die without a will?
If you fail to plan your estate and die without a will, the State of Kansas will create an estate plan under what is called intestate succession or descent and distribution. Briefly stated, adverse results can occur if you die without a will. The law prescribes both the persons to whom your property will pass to and the division of your estate among those persons. The distributions provided by law are inflexible and may not satisfy your desires as to the distribution of your estate. In addition, any amount distributed to your children may require a legal conservatorship if they are minors at the time of your death.
What is a will?
Simply put, a will is a written document containing instructions on how to divide your property at the time of your death. It tells the court who you want your personal representative to be as well is the guardian for any minor children you might have. The court oversees the administration of the will and distribution of property pursuant to your instructions through a process known as probate.
Is a handwritten will legal?
A handwritten will may be a valid holographic will if the signature and material provisions are in the handwriting of the testator. Such a will need not be witnessed or comply with requirements for an attested will. The holographic will may be inadequate and can be a fruitful source of litigation because they are often composed of someone with no legal training.
What is a personal representative?
This is the person you designate to serve as the personal representative of your estate. You may be more familiar with the terms executor or administrator for such an individual. A WORD OF CAUTION: I have had people come into my office claiming that they are the executor under a will and I have to point out to them that they have no authority whatsoever to act on the will until it is admitted into the probate and they are appointed executor by the court.
What is a codicil?
Sometimes you do not have to rewrite an entire will. It can be supplemented and/or amended by a document called a codicil. It has to be executed in compliance with statutory requirements. A WORD OF CAUTION: If you are thinking about making changes to your will, do not write the proposed changes on the original document for, should you pass away before the original is changed, and it is offered for probate, the court may have a difficult time determining what your intent was in reading typewritten words versus handwritten notes. The better practice is to make the proposed changes on a photocopy of your will. From there, get it to an attorney as quickly as possible so the codicil can be drafted and executed.
What are the advantages of having a probate?
Some people claim that because probate proceedings are held in open court it benefits potential heirs by providing everyone equal access to information contained in the court’s probate file. Court supervision benefits everyone by providing an orderly manner of wrapping up a decedent=s estate. Institutions will recognize probate court orders as binding. The rights of the unknown heirs are severed. If a decedent owed debts and proper claims are not filed with the court, then they can be legally barred. The title to real estate is conveyed to the heirs pursuant to a journal entry of final settlement. And, if necessary, the estate may pursue any required litigation.
What are the disadvantages to having a probate?
It can be expensive, time-consuming, and somewhat intrusive. If your estate is probated without a will, the cost of probate could be greater. It can be a protracted legal procedure if it is contested and such proceedings can take several years. Probate proceedings are a public record and a family=s financial records are open for inspection. Anyone can check out a listing of the decedent’s and/or his family’s savings, investments, real estate, personal property, etc. Kansas is now implementing a process where court records will be available on-line so that anyone with a computer can have access.
Can I avoid probate?
Yes, you can. First of all, it depends upon how you title all your property. If couples own all of their property in joint tenancy with right of survivorship and one spouse passes away, the property will transfer to the surviving spouse.
A WORD OF CAUTION: Many surviving spouses mistakenly believe they need no further estate planning. If all of the couples’ property is in the name of the surviving spouse who takes no action and then passes on, there can be serious consequences as well as an unnecessary probate.
ANOTHER WORD OF CAUTION: I do not recommend that my clients convey property back to themselves and their children as joint tenants with right of survivorship in an attempt to transfer property and avoid probate. A child may have credit problems and, if there is a joint tenancy interest in property, a creditor may possibly go after it even though child never put any money into the property. So you may wind up in litigation defending your property from your child’s creditor.
What is community property?
Under a community property state, marital property is generally deemed to be owned one B half by each spouse regardless of legal title to the property. However, Kansas is not a community property state.
Where should I keep my estate planning documentation?
If you are going to use the bank, make sure someone other than yourself is on the signature card so that, in the event of death, the safe deposit box can be opened to retrieve the will. If not, then a court order may be necessary to open the box to look for the will.
Where should I keep my burial instructions?
First of all, most people do not have written instructions. I provide such a document to my clients so that they can complete it. It contains such information as the type of services requested, the type of music is desired, who the pallbearers should be and who to contact.
A WORD OF CAUTION: The last thing you want to do is keep burial instructions with your will. It is been my observation that a lot of families do not read the will until after the funeral services and burial are concluded. It is not uncommon to discover that the burial instructions are somewhat different than what the family had planned.
What is a HIPAA authorization?
Everyone is subject to the federal law entitled Health Insurance Portability and Accountability Act of 1996. It restricts access of others to your healthcare information held by physicians and hospitals. It sometimes restricts access to health information to your spouse or loved ones. A HIPAA authorization lists people to whom such information can be released.
A WORD OF CAUTION: It is my recommendation that you give a copy of this authorization, along with your living will, to your personal physician so that he has this information in his records.
What is a living will?
An advanced directive to physicians which is also referred to as a living will is a document providing instructions to your attending physician to either continue or withhold life-sustaining procedures in the event of a terminal condition or illness. In other words, one might prefer to receive comfort care rather than to be kept alive by artificial means.
A WORD OF CAUTION: Make sure you have copies of this document readily available in case such an event occurs.
What is a trust?
A trust is a legal entity created by a written document to hold and deal with property for the benefit of specified persons or entities.
What is a trustee?
The trustee is a person or entity responsible for carrying out the terms of the trust. He owes a fiduciary duty to the beneficiaries of the trust.
What is a beneficiary?
The beneficiary is a person or entity named in the trust to receive income and/or assets from the trust.
Who should my trustee be?
The trustee could be a spouse, child, friend, business associate, financial institution, etc.
A WORD OF CAUTION: There is an element of trust involved in choosing a trustee. You need to decide who you feel most comparable with in carrying out the terms of the trust.
What is a testamentary trust?
It is a trust that is created in a will. For example, a couple passes away leaving minor children. Rather than leave property in the will directly to the children, the trust is created within the will so the property is managed for the children’s support, maintenance, and education. Such a trust is only effective after one dies and the will is probated.
What is a living trust?
It is a trust that goes into effect upon its execution by the person who created it. Such trusts are being utilized increasingly to maintain privacy, avoid taxes legitimately and bypass probate.
What is a revocable living trust?
Revocable means that the trust can be amended whenever desired. This type of trust provides maximum flexibility in controlling trust assets and the ability to change the trust whenever desired. Normally, while parents are alive and healthy, they act as the trustees having total control over the property in it. They are also the beneficiaries. If one or both parents suffer from a disability, then there are detailed instructions as to how the parents should be cared for and how the property in the trust should be managed. Again, since these trusts are revocable, the instructions can be changed or canceled at any time. Furthermore, property can be placed into or removed from the trust at any time.
How does a trust receive its property?
This is called funding. If real estate is involved, then it has to be conveyed into the trust. Ownership of bank accounts has to be changed over to the trust. First the property, such as household furnishings, furniture and appliances as well as jewelry, has to be signed over to the trust. The same goes for investments. So sometimes beneficiary designations have to be changed on the investment accounts, insurance policies, etc. as well.
A WORD OF CAUTION: Sometimes people do not follow through with the funding of their trust. As a result, when they pass away, there can be assets outside the trust which may very well cause a probate to be filed.