Estate planning has never been easier. A recent special executive order from Missouri’s governor has authorized online notarization and witnessing of important legal documents. This new legal change, coupled with readily accessible video conferencing in each stage of the process, makes getting in place a Will, Trust, Power of Attorney and/or Health Care Directive easier than it’s ever been. The entire process can now take place by video conference or phone call with no need to make an office visit. Estate planning is critically important for individuals and families as they plan for their finances and the well-being of their family amidst life’s uncertainties. Now, it’s also pretty darn easy.
We are in unique and challenging times. We are social distancing, staying at home and adjusting to abnormal working and personal conditions. As we do our best to stay healthy and help keep others healthy, many people are also giving renewed consideration to having a proper estate planning in place. Indeed, a Will, General Power of Attorney, Advance Health Care Directive and Health Care Power of Attorney (and in many cases, a Revocable Trust) are important to have in place. These documents plan for circumstances of incapacity or death and are important in any environment—but for many, these feel a bit more pressing right now. Fortunately, estate planning can be done quick and seamlessly during this time. In fact, in many instances, we can prepare and even have signed all documents without you needing to leave your home. Video conferencing and electronic notarization (recently authorized by executive order in Missouri) offer reliable and legally enforceable methods to get the right documents in place while staying healthy and comfortable. We offer free initial consultations by phone (and by video conference) and are committed to expedite estate planning documents to ensure your peace of mind and legal protection.
A trust can be an important tool in estate planning. Avoiding probate, providing for young beneficiaries, addressing unique situations and providing added peace of mind are important virtues and have led to the frequent use of trusts in estate planning for people in various circumstances. So, what is a trustee of a trust? And who serves as trustee? The trustee is essentially the “manager” of the trust. While directed by the language of the written trust agreement (and applicable statutes), the trustee generally has discretion in making investments, managing trust assets and (within set parameters) providing resources to the beneficiaries of the trust. When someone creates a trust, they frequently would serve as their own trustee while they are alive and well. But at some point, that trust creator dies (or could become mentally unable to serve as trustee). So, who serves as trustee next? That depends on who you appoint! The written trust agreement should provide detailed direction about who should serves as a successor trustee (and ideally includes several successors / back-ups). This could be an individual (friend, family member) or could be a professional trust company. A successor trustee would need to accept that role before serving—a fact that underscores the need to name at least a few backups. However, if all named trustees decline to serve, have passed away or are otherwise unable to serve, a court could also appoint a successor trustee.
Simplicity and thoroughness are always the most important considerations when considering needed changes to estate planning documents. Where possible, an amendment to an existing document may be the simplest way to make needed changes—which is often the case for a Will or Trust. Other times, a new document is the best approach—which is quite frequently the case for power of attorney documents. When meeting with a client that needs a change to their estate planning documents (due to life changes, family changes, changed goals, etc.), my commitment is always to implement changes efficiently and in the most cost-effective manner. Of course, being thorough and accurate are also central priorities. In the end, a careful review of existing documents and a thorough understanding of needed changes provide the framework for how best to revise an estate plan.
A beneficiary deed transfers real estate to a named beneficiary upon the death of the property owner. In other words, when a property owner dies, their real estate can go to a desired family member (or someone else) without going through probate. A beneficiary deed can be a particularly desirable tool because it is relatively inexpensive to put in place, it feels “simple” and it does not need to be connected to a Will or Trust. While every situation varies, preparing and recording a beneficiary deed often makes the most sense when real estate is the main asset owned or when there is only one intended beneficiary. Of course, there are instances where a beneficiary deed is not advisable. Often, this might be in a situation with numerous intended beneficiaries or where the property owner ultimately desires the property to simply be sold.
A Will is one of the most basic elements of estate planning. In a word, yes—you do indeed need a Will. Good estate planning often involves much more than that (think powers of attorney, beneficiary designations, perhaps a living trust) but a Will is nearly always a basic and central part of an effective estate plan. A Will directs where your property goes when you die—while also including administrative designations, procedural directions and other important legal provisions. Additionally, for a parent of a minor child, a Will typically includes a nomination of someone to serve as a successor guardian. Of course, every situation is different and every person is different—and every estate plan is different. However, in nearly every instance, you do need a Will.
Every state in the country (including Missouri) allows a business owner to create a limited liability company (LLC). So what’s the point? Why operate your business as an LLC? An LLC, along with other forms of business entities, provide two key benefits. First, an LLC (when properly organized and properly maintained and operated) provides liability protection to its owners. In other words, liabilities of the company remain only liabilities of the company, while the owner(s) is not financially at risk beyond their investment/ownership in the company itself. There are important limitations to this, but it is a tremendous benefit and protection to a business owner. Second, an LLC allows for what is called “pass through taxation.” This means that the company itself is not liable for income taxes. Rather, income tax liability simply passes through to the LLC owners. This stands in contrast to some types of corporations that require a sort of ‘double taxation’ where both the business itself and the owners are taxed. Every business is different, but for many business owners, an LLC is an valuable tool—for the smallest one-person business to large international companies.
Cost is an important consideration for anyone planning to put in place an estate plan. It is worth noting that the court processes that result from not having any type of estate plan generally dwarf the cost of proactive planning. However, cost remains an important component of making the right decisions. Every individual’s situation is different and every family’s situation is different, so it makes sense that good estate planning is carefully crafted to the needs, goals and plans of each person. Accordingly, there are always some unknowns in cost planning until we are able to sit down and talk about these sorts of particulars (and in turn what type of planning will be most effective). As an experienced estate planner, my goal is always to create the most efficient yet comprehensive estate plan to meet the needs of my client. Minimizing cost is a central goal and is always front of mind as we talk through the possibilities of various tools and documents to create the best plan. With that in mind, a fair range of cost for a single person wanting to put in place a Will, a General Durable Power of Attorney, a Health Care Power of Attorney and an Advance Health Care Directive would be about $700-900. The same documents for a couple (two individuals) or family will often fall in the range of $850-$950 (total). A plan including those same documents but adding a revocable living trust will usually add about $1,000 (total) to the cost. Of course, fees can vary a bit depending on needs, goals and complexity but we commit to a fixed fee after our first meeting—which remains constant no matter how many changes, meetings, questions of drafts end up occurring along the way. And my initial meeting/consultation is always completely free of charge!
What property goes through probate?
As a general rule, all property owned by a decedent at his/her time of death is part of the “probate estate.” This means that (unless some prior planning has occurred), in order to be legally transferred to a new owner, property must be administered through the court. This includes all of the following items:
1. All property transferred by a valid will (please note: simply having a will does notavoid probate)
2. All property not indicated in a will
3. All proceeds from accounts or insurance policies transferred to “the estate of” or to beneficiaries that have died prior to the decedent
4. All types of property (real estate, bank accounts, personal tangible property, stock, investments, etc., etc.)
Probate is an entirely avoidable event. The process is typically undesirable due its time, expense and administrative requirements. Proper planning, through various methods, can remove all assets from the probate estate, allow for a smooth transfer of a decedent’s property and assure that family goals and intentions are squarely met.