People often ask about providing for their family after they are gone and only ask about Wills. However, have you ever stopped to think about how all of the wealthiest families in the country provide for their heirs? People like the Kennedys and the Rockefellers? Well, if you listened very carefully, you may have heard the mention of one of the younger Kennedys receiving money from a trust fund. That’s because they have the smartest lawyers and could afford to finance a trust fund for their heirs.
Now, you can have a trust established for your heirs as well as yourself at a very reasonable cost. The tax laws provide a means by which you can avoid estate taxes and huge expenses by forming a trust during your lifetime which will provide for your spouse and/or your children at the creation of the trust as well as after you’re gone.
Did you know that a trust can also be used during your lifetime to avoid the necessity of turning everything that you’ve worked so hard for all your life to Medicare or Medicaid? You’ve probably heard by now that if you must go into a nursing home or long term care facility, you must pay your own way until all of your assets have expired. Only then can you have the government pay for you. It seems very unfair that those who did not work all that hard or who gave away all their assets well in advance of having to enter a nursing home get immediate care from the government - and it’s the very same care you’re going to have to pay for out of your own money!
Well, there’s a way around that scenario that is both honest and legal and saves you from losing everything in the meantime. You can form a trust that gives your home to one or more of your children and you can retain a “life estate” in the home so that you will never have to leave it. Many people fear that their own children will eventually turn on them or justify putting them in a home once their care becomes too burdensome for them, so they fear giving them their home outright. And that fear is not unfounded from our experience. The way to do it is to create a trust in which you make them Trustees of the trust and also the beneficiaries after your death or after you’ve entered a long term care facility (and you can set up the requirements in advance as you create the trust conditions). That way, they will not be able to do anything with your home until the conditions you have set have been completed. At the same time, you’ve “threaded the needle” through the gauntlet of taxation and Medicare/Medicaid problems all at once. The details of how to do all of this can be explained to you by a professional who does this type of work regularly.
When people die they have estates, whether they have a will or not. The difference is if you have a will, you can determine who gets what and who does the administering of your wishes. If you do not have a will, then the state determines who will be your administrator and who gets what portion of your worldly belongings. Either way, unless your will and other documents have been set up to avoid Probate, you will have an estate to administer. That means that someone is going to have to gather all of your belongings that haven’t already been given away by operation of law (i.e. a deed owned by a husband and wife, etc.) and then distribute them according to your wishes.
Usually, an attorney is hired to assist the administrator or executor. An attorney is familiar with all of the dates necessary to meet and knows how to go about filing all of the various documents with the Surrogates Court and with the IRS. An attorney also will write to all of the banks and brokerages and accumulate all of the assets for you.
Oftentimes an attorney can suggest ways to avoid various estate taxes that you might otherwise inadvertently pay, which can save the heirs a great deal of money that would otherwise go to the government for no reason.
It is important to have an experienced attorney handle your family’s estate when the time comes. We are available to advise you and are willing to be interviewed in advance by both the person who has formed an estate and/or the heirs so that when the time comes you will know who to go to while you are thinking about other things. Feel free to give us a call and set up an appointment to come in and interview us at your convenience. It could save your family a great deal of money.