Surveys that are conducted consistently find that most people do not have estate plans in place, but curiously, the majority of these people think that estate planning is important. Many of these folks drag their feet because they are not very anxious to address what they perceive as a very complicated matter.
In fairness, there are some relatively complex legal structures that are sometimes used in the field of estate planning. But our attorneys have refined their knowledge of every strategy available to residents of Missouri and Kansas, so we know exactly how to proceed.
When you work with an attorney from our firm, we will gain an understanding of your family dynamic and your financial situation. We will explain your options and make recommendations, and at the end of the process, you will be able to make fully informed decisions.
Although personalized legal attention is the key to a well-constructed plan, there is a core structure that can be adapted to suit the needs of each individual family.
1. Asset Transfers
The facilitation of postmortem asset transfers is at the core of the estate planning process. A will is one option, but a will is not going to be the best choice for many Kansas City families.
One drawback with a simple will is the inability to provide spendthrift protections, because there is no asset protection, and inheritors receive lump-sum inheritances. Another negative is the unwieldy estate administration process that unfolds when a will is used.
The will would be admitted to probate by the executor, and the inheritors would play a waiting game. This process will take eight months at minimum in most jurisdictions, and no inheritances are distributed while the estate is being probated by the court.
Privacy is lost, because records are available to anyone who is interested, and probate expenses consume a large chunk of the estate.
However, if you use a living trust as the centerpiece of your estate plan, these drawbacks and limitations would be avoided. You could include a spendthrift clause that would protect the principal from the beneficiary’s creditors, and you could provide limited distributions over an extended period of time.
When you have a living trust, there is no loss of control during your lifetime, because you would act as the trustee. In the trust declaration, you would name a trustee to succeed you after you are gone.
When the time comes, the trustee will distribute assets to the beneficiaries in accordance with your wishes, and the probate court would not be involved.
This is one type of trust that can be used, but there are others. For example, you can convey assets into a supplemental needs trust to provide resources for a loved one with a disability without impacting government benefit eligibility.
A trust can also be used for nursing home asset protection purposes. Many elders require long-term care eventually, and Medicare does not pay for living assistance. Medicaid will pick up the tab, but you cannot qualify if you have significant assets in your own name.
When you convey resources into an irrevocable Medicaid trust, you would have no access to the principal, but you could accept distributions of the trust’s earnings. If you apply for Medicaid, the principal would not count, and timely eligibility can preserve your legacy.
These are a handful of the different types of trusts that can be used, and there are many other tools in the estate planning toolkit.
2. Incapacity Planning
The other piece of the puzzle is the incapacity planning component. You should state your life-support preferences in a living will, and you need a durable power of attorney for health care. In the power of attorney, you name a representative to make medical decisions on your behalf that are not related to life-support.
If you have a living trust, you can name a disability trustee to administer the trust in the event of your incapacity. To account for property that is not held by a trust, you can include a durable power of attorney for property.
Take Action Today!
There is no reason to be frozen with inaction because you simply do not know where to begin. If you are ready to get your affairs in order, we can be reached by phone at 913-262-2000, and you can fill out our contact form if you would like to send us a message.
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