After over 20 years as an estate planning attorney I feel pretty well qualified in giving people advice on estate planning matters. I have helped plan for death and I have helped clean up after death; hundreds and hundreds and hundreds of times. Also, this year, I have dealt with the clean up after my mom’s death and serving as her trustee. The combination of significant professional experience and the untimely death of my mom give me the ability to speak with authority here. Please consider each point I make here to help you and your loved ones get the most out of your estate plan. I present my most practical estate planning blog post EVER!
PRACTICAL POINT #1: Keep it simple if you can. I see it all the time. People want to control from the grave and come up with difficult to administer provisions. Or provisions that are hard to enforce due to changed situations and circumstances. Keeping it simple can avoid a lot of problems. Of course there are some situations where simplicity doesn’t work but consider the simple options first.
PRACTICAL POINT #2: Living trusts are pretty great. I have seen articles about whether wills are good enough for some people. Or if probate can be avoided without using a trust through joint tenancy and beneficiary designations. The point of this post is not to get into the details about why that’s often wrong. The key is trusts, if set up right, are really pretty great! They avoid probate court which should save your loved ones a lot of time and money. A proper trust takes care of you at death AND at incapacity.
PRACTICAL POINT #3: Fund your trust. I remind every client to fund their trust. I send letters, I tell them in meetings, I send emails, I tell them on the phone. Not sure what else I can do. People, and this means you, GET YOUR ASSETS PROPERLY TIED TO YOUR TRUST. There are some exceptions (retirement assets) but most assets should be tied to your trust. Your house should be deeded to your trust. Your banks and investment accounts should actually be held in the name of the trust in the financial institution’s records.
PRACTICAL POINT #4: Do a restatement of trust not amendments. I had a new client the other day who came in with 4 or 5 amendments to an old trust. They had a huge pile of paper. It was a mess. In most cases a restatement of trust can give you one clean trust document. This will make it much easier for your trustee to carry out your wishes after your death. If your attorney tries to do an amendment, rather than a restatement, ask them about the latter as an option.
PRACTICAL POINT #5: Consider adding a co-trustee while you are alive. Some people don’t like the idea of having their child (even if they are 60 years old) or other trusted person on their bank account. However, adding your trustee as a co-trustee while you are alive can make things so much easier. By doing that they are already on your accounts when you go in for surgery or go into a nursing home. Likewise, they are already on your accounts at death. This way there is no delay in them having access to your funds for paying your bills.
PRACTICAL POINT #6: Consolidation. While being aware of FDIC insurance is important and advised you should look into consolidating assets where you can. The less accounts you have when you die the easier it will be for your successor trustee. Less is more! There are just no other ways of saying it. Again, be aware of FDIC and other insurance coverage issues but for most people they can consolidate their accounts without concern.
PRACTICAL POINT #7: Clean up. Semi-related to consolidation I encourage you to get rid of the little stuff. If you have a $100 savings bond cash it out! Even $500 cash it out! Maybe even bigger. Weigh the interest rate and the tax benefits against whatever headache you may be leaving for your loved ones. Likewise for mineral rights in another state, small partnership interests, timeshares you don’t use, and other small assets. When in doubt throw it out!
I could go on but I’ll stop there. If you have questions about how have a practical estate plan let me know. -John