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Estate planning can be complicated and when beginning the process you are sure to have many questions. We have compiled a list of some basic estate planning questions to educate you on the first steps in the process. At Berkshire & Burmeister we stand committed to educating you on estate planning and are ready to help you begin your estate planning process today.
Probate is the court and process that looks after people who cannot make their own personal, health care, and financial decisions. These people fall into three general categories: minor children (under the age 19), incapacitated adults, and individuals who have died. Probate proceedings can be expensive and time-consuming. Many people choose to avoid probate for their estates in order to save money, spare their heirs a legal hassle, and keep their personal affairs private. What many people do not realize is in Nebraska some version of probate is nearly always required because of the State’s inheritance tax.
This is the most common form of asset ownership between spouses. Joint tenancy has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to their assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces, and/or lawsuits of any additional joint tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the maker dies and the original Will is delivered to the Probate Court. Everyone with minor children should have a Will. It is the only way for the deceased parent(s) to nominate the new “parent” of a minor child. Special testamentary trust provisions in a Will can provide for the management and distribution of assets for your heirs.
Sometimes called an Advance Medical Directive, a Living Will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes, a Living Will is executed along with a Durable Power of Attorney for Healthcare, which gives someone legal authority to make your health care decisions when you are unable to do so yourself.
If you die without a Will in Nebraska, your assets will go to your closest relatives under state “intestate succession” laws. Only assets that would have passed through your Will are affected by intestate succession laws. Usually, that includes only assets that you own alone, in your own name. Many valuable assets don’t go through your Will and aren’t affected by intestate succession laws. Here are some examples:
Each of these assets will pass to the surviving co-owner or to the designated beneficiary(s) you named, whether or not you have a Will.
These documents allow you to appoint someone you know and trust to make your personal financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a probate proceeding known as a conservatorship. This is the court proceeding where a judge determines who should make these financial decisions for you under the ongoing supervision of the court.
This is an agreement with three parties: the Grantors (people making the trust), the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trust maker’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.
Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a Revocable Living Trust. A trust allows you to bring all of your assets together under one plan.
These are only a few of the basic questions you may have when beginning your estate planning process. We know the process can be complicated so please contact the estate planning attorneys at Berkshire & Burmeister for specific questions and recommendations regarding your estate plan today.