Do you and your spouse have current wills? Jackson Law Office recommends that all clients review their wills periodically. Wills can be affected not only by the passage of time but also by events such as marriage, birth of a child, divorce, death of a family member or a change in financial situation.
We also recommend that clients have financial and medical powers of attorney and that they consider living wills. Periodic reviews should include beneficiary designations for life insurance policies, IRAs, other retirement plans and the like.
A FEW WORDS ABOUT TRUSTS
Trusts are legal arrangements that can be used in a wide variety of situations. Typically, a grantor creates a trust and sets aside money or other property with a trustee for the benefit of others, called the beneficiaries. A trust created within a client’s will (a testamentary trust) would take effect at the client’s death. A trust created by a declaration or an agreement (called a living trust or an intervivos trust) can take effect at any time.
Trust applications might include:
GRANTOR or SELF-MANAGED TRUSTS:
An investor, for example, might create a declaration of trust for his or her own investments. Typically, the owner would be the initial trustee. But the trust instrument would provide for a substitute trustee in the event of incapacity or death. The trust could continue to meet family needs beyond the grantor’s lifetime, and both the grantor and the family would be assured that someone would always be available to look after the investments. Disposition ultimately would be made as the document provides.
A TRUST FOR A FAMILY MEMBER:
Property can be set aside in a trust fund for the benefit of a spouse, child or other family member - for example, someone associated with a disability or some other limitation. Such arrangements are also often created as spendthrift trusts, which means that the family member’s creditors should not be able to attach the money in the trust.
A client might hold a life insurance policy in a trust. Upon the client’s death, the insurance proceeds could continue to be held in trust for the benefit of family members.
Clients can set aside money or other property for the benefit of a favorite charity such as a church, a university (e.g., scholarship) or other worthy causes. Some clients create private foundations to perpetuate their charitable giving, or they might create a fund within the local community foundation. In particular, if a client’s estate is subject to federal estate taxes, we recommend that charitable giving be an important part of the planning.
A FEW WORDS FOR YOUNG PEOPLE
We take a special interest in our younger clients including, in particular, parents of small children. We know that young families often have tight budgets, but we believe that our younger clients, like their older counterparts, at a minimum should have financial and medical powers of attorney in place in case of illness, injury or other unanticipated circumstance. We also believe that younger clients should have wills, and if the client should have children, then the will should include provisions for the appointment of guardians.
Good planning can also include coordination with life insurance benefits, retirement funds and the like so that an adequate fund of money can be created for the children’s benefit. Please ask us for the particulars.