Young Adults Need An Estate Plan

When a young person dies, it is generally sudden and unexpected. With youth and health, Estate Planning is not a priority. Except when death happens and those you leave behind would have been better off if you took the time to create a Will or a Trust.

When Glee star Cory Monteith passed away, he had an estate worth over $800,000 and had not taken the time to create a Will or Trust. Because of this lack of planning, it took over a year and a half for his estate to settle. You see without creating an Estate Plan of your own, your estate follows intestate rules found in Idaho’s State Statutes.

If you were in Cory’s position, single and without children, your mother and father would receive an equal share of your remaining assets.

In Cory’s situation, his divorced parents fought that entire time over whether his father was deserving of receiving one-half of Cory’s estate. Mom claimed Dad was an absentee father, who hadn’t seen Cory in years, and refused to pay child support. Eventually, Dad signed an agreement stating he did not want his legal share of Cory’s estate, but this was after much public humiliation.

Because the Probate court process is public, the bickering between his parents became news-worthy. Granted, if Cory had a Will, his estate would have still gone through Probate. However, with a Will, Cory could have dictated who he wanted to leave his estate to.

To add insult to injury, Cory’s money was probably being used to defend the State’s laws giving both parents an equal share of their son’s estate.

What about what Cory would have wanted? He had a serious relationship with Glee co-star Lea Michelle, certainly he would have wanted to leave her something. Tough. Without making your own Will or Trust, your particular wants are irrelevant. The Probate court will rely on the intestate statute of the state you live in, which generally provides what a general distribution would look like for someone in a similar situation.

Have you ever wondered how old intestate laws are? Most of them are very old. Imagine how different society and what we consider family is now, compared to a law originally written in the 1700 or 1800s.

So, regardless of how old you are, if you want certain people to receive a portion of your estate, or more importantly, if you have people you absolutely do not want to see receive any of your estate, make your decision known. Create a Will or Trust, otherwise a bunch of guys who are long gone will make that decision for you.

Schedule a conversation with Justin Jeppesen to take the first step towards creating your complete estate plan! With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. If you have more questions, we'd love to help! Contact Jeppesen Law now. (208) 477-1785

See Danielle Mayoras & Andy Mayoras, Cory Monteith Shows How Even Young Adults Need Wills, Forbes, Jan. 28, 2015.

Is A Will an Estate Plan?

             When clients and I first sit down to talk about an estate plan, they generally state that they need a Will. This regularly occurs because a Will, as far as estate planning is concerned, is a commonly talked about tool. But that is all it is, a tool in your estate plan. A very important tool, but not a complete plan.

             After asking a series of general and specific questions, the clients decide whether they need a will or a trust, and the additional documents which make up a complete estate plan. For a Will based plan those other documents include:

   

1. A durable power of attorney for financial decisions;
2. A durable power of attorney for medical decisions;
3. If the client is a parent of minor children, a springing power of attorney for minor children;
4. A health care directive (or living will); and
5. A HIPAA release.

             Each of these documents perform specific functions that the others cannot. The biggest distinction between these documents and a Will, is that the Will does not carry any authority until you pass away and it has been validated in a Probate court proceeding. The listed documents are for your protection while you are alive, but not able to speak for yourself. That can either be due to incapacitation, mental illness, or in some cases disappearance.

Because of this, all are needed. So although a Will is a great first step, and an important tool to have, it is not a complete plan.

Schedule a conversation with Justin Jeppesen to take the first step towards creating your complete estate plan! With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. If you have more questions, we'd love to help! Contact Jeppesen Law now. (208) 477-1785

What Type of Will Can an Idaho Attorney Draft?

What type of will can an Idaho attorney draft? First, a will can be drafted to meet many situations, but most wills can be categorized four ways; the simple will, the complex will, the pour-over will, and the living will.

    Simple Will

         The simple will is most basic estate planning tool, and because of that, it is the most widely heard of. It takes effect after the creator passes away, as long as the creator strictly adheres to Idaho’s technical requirements of a will. The main purpose of the simple will is to name an executor. The executor will carry out the terms of the will. The terms of the will generally cover who will inherit a person’s property, where and how a person desires to be laid to rest, and if that person has minor children, who will act as Guardian of the child and Conservator of that child’s estate. It does not include trust provisions.

    Complex Will

          The complex will is a more advanced estate planning tool than the simple will. These wills include testamentary trust provisions, but are similar to simple wills in that they are not controlling until the creator passes away and that they carry out similar purposes as the simple will. Commonly, trust provisions in a complex will deal with inheritance distribution provisions for minor children. It names a trustee to hold and manage the minor child’s inheritance according to the terms of the testamentary trust. The purpose for the inheritance distribution provision is that unless a trust is used and covers this topic, Idaho’s Uniform Transfers to Minors Act allows minor children to receive their entire inheritance at age 21. Imagine what you would do with that amount of money at age 21.

    Pour-Over Will

   

          A pour-over will should be prepared as part of your trust package. The purpose of the pour-over will is to gather any assets that were not properly titled in the name of your trust and place them within the ownership and authority of the trust and its provisions. A trust without a pour-over will is not a properly created trust package.

    Living Will

A living will is not really a will. A living will is often confused with a simple will. My belief is that the similarities between the terms “living trust” and “trust” lead people to believe a “living will” and a “will” are the same document with the same purpose. For this reason, I like to refer to them as health care directives. It is a more accurate representation of the purpose of the living will, which is controlling when you are no longer able to make health care decisions for yourself because death is imminent or you are permanently unconscious. You make the end of life decisions, not someone else.

Schedule a conversation with Justin Jeppesen to take the first step towards creating your estate plan! With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. To help jump-start your own planning, download and complete the Client Information Form.

If you have more questions, we'd love to help! Contact Jeppesen Law now.

New Year's Resolution to Review Your Estate Plan

Welcome to the New Year!

We hope your 2014 was full of memories, triumphs, and lessons learned. As you turn to the New Year and begin to list achievements you will accomplish in 2015, have you thought about updating your current Estate Plan?

    This may not seem like a typical item to place on your do-to list, but think about it this way. 2014 provided many opportunities for your life situation to change since your created your current Estate Plan.

Many of us have experienced additions to our lives; a new spouse, new child, new grandchild, new home, new investments, or new inheritance. Sadly, many of us have also experienced loss to our lives in 2014. Whatever your situation may be, your 2015 life looks different than your 2014 life.

First, locate your current Estate Planning documents. If you have difficulty finding them, imagine how difficult it would be for a grief stricken family member to find them. If your attorney gave you a folder to hold your documents, make sure all the documents you created are there. Locate the original, whether it be in the folder, a file, safe, or with the attorney who drafted the document.

After locating the originals, store them some place safe and make sure that others can find them if you are not able to retrieve them yourself. If the originals are with the drafting attorney, make sure that your loved ones know who that attorney is and how to reach the attorney.

Second, review the documents to make sure that the documents still accomplish your current goals and wishes. Life changes have a way of altering the goals of our Estate Plan. Are the people you have named to specific responsibilities still your desired choice for that responsibility? Are those people still willing and able to perform the names responsibility?

If you have minor children, are your chosen Guardians still the people you wish to have your children raised by? Has their life changed to a degree this year that has created doubt or concern about their ability or desire to take on your children in case something were to happen to you?

Schedule a conversation with Justin Jeppesen to ensure your estate planning documents are in order! With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. To help jump-start your own planning, download and complete the Client Information Form.

If you have more questions, we'd love to help! Contact Jeppesen Law now.

Estate Plan as part of New Year's Resolution? You bet!

Welcome to the end of 2014!

We hope your 2014 was full of memories, triumphs, and lessons learned. As you turn to the New Year and begin to list achievements you will accomplish in 2015, have you thought about creating your current Estate Plan?

This may not seem like a typical item to place on your do-to list, but think about it this way. You have had up through 2014 to build your family and finances, why not take 2015 to build a plan just in case you are no longer here to care for those you love?

Without proper planning, all that we worked toward during our lives can end up being a source of heartache and strife for those we leave behind. The spouse left behind may not know what bills need to be paid, and when. The children, who seemed to get along during their adult years, unfortunately slip back into those adolescent, childhood rivalries without you around to keep the peace. Those people you asked to be God-parents to your children won’t really have any legal authority to raise them unless you create a legally binding document.

So, face your fears and build a plan that will allow your family the time to appropriately mourn you and not leave them to worry about what to do after you pass. Tell them what to do, they will thank you for it.

Remember, just because you create a plan in case you pass away, does not mean that you will actually do so this year.

                                   

Jeppesen Law can provide you with a comprehensive Estate Planning. With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. If you have more questions, we'd love to help! Contact Jeppesen Law now, 208-477-1785. 

We wish you all the best.

Trusts and 10 Quick Tips About Them

These blog articles have one goal, education through communication. The conversational tone of these articles is meant to further that goal. With that in mind, lets dig into…

The Trust.

The Trust is one of the five pillars of estate planning. In Super Easy Ways to Understand Basic Estate Planning Terms, we commented that a trust allows for some pretty cool and specific distributions which can be used to help impart your values and beliefs unto your beneficiaries. This is so true, but the problem with a trust is that it is one of the five pillars that is most heard of or reference, but least understood aspects of estate planning.

    For our conversation, the term trust will refer to a revocable living trust, a revocable trust, life trust, family trust, grantor trust, or AB trust. This is because they all are essentially describing the same item.  That is where a living person creates an “entity” that has separate legal existence from the person that created it, and this “entity” holds property for the benefit of beneficiaries.

The Grantors generally maintain full control over the trust property while they are alive, with the ability to revoke, amend, or modify the provisions of the trust. One of the provisions in the trust is to appoint a trustee or trustees of the trust to manage and operate trust. In most trusts, the husband and wife are the primary, or first, trustees in charge of managing and operating the trust property. The Grantor can be the primary trustee because a trust exists the moment it is signed, and that existence is separate from the Grantor.

    In addition to the immediate existence and existence separate from the Grantors, trusts come with many benefits and very few downfalls.

   

    Personal and real property can be transferred into and out of trust with relative ease. Transfer requires retitling the asset.

The need for going through the probate process is eliminated (see The Absolute Beginner's Guide to Answering: Will Or Trust for more on probate). Probate is not required because the trust is the owner of the assets. Since the trust has a separate existence from the Grantors, the trust “stays alive” even if a Trustee or Grantor passes away, and the trust property continues to be governed according to terms of trust. On a side note, this is a great way to ensure all of your assets don’t end up in the hands of your minor children when they reach 21. By eliminating probate, you eliminate the expenses tied to probate, the delay of receiving property through the probate process (especially helpful for the surviving spouse), and you increase the level of privacy by avoiding the public nature of probate.

For a surviving spouse or other beneficiary, they can have immediate and continuous access to cash flow from the estate. This is because a will, or having no estate plan at all, requires a court order stating which person or people are entitled to receive the estate’s assets. Death, or naming a new trustee, doesn’t change how trust or its assets are handled, because the property is continuously governed by the terms of the trust.

A trust reduces the chance of someone contesting your estate plan after your passing. A trust takes away the need for the document which is usually challenged, the last will and testament. This a a great aspect, because if someone challenges your plan, whether it be a will or a trust based plan, the trustee must defend your plan in court. The trustee uses the assets of the trust to pay for the defense. The result is often a smaller estate to pass on to your loved one.

After mentioning a number of great benefits of a trust, I have to bring up a major downfall associated with a trust. This downfall is not a side effect of the trust itself, but more of the implementation of the trust. A trust with no property transferred into it is almost useless. Because the trust has a separate existence from the Grantor, any of the Grantor’s property not actually transferred into the trust, is not owned or controlled by the trust. If you work with Jeppesen Law, PLLC, we ensure that your trust begins and stays properly funded throughout its existence. We do this by either funding the trust ourselves or assisting you in funding the trust.

Call the office to set up an appointment to create your own trust or to have us review your current trust to ensure it is adequate and fully funded. (208) 477-1785.

The Absolute Beginner's Guide to Answering: Will Or Trust?

Good morning and welcome back!

Having a plan makes any life decision easier.   Knowing what to do is made simpler if we know what terms mean. In Super Easy Ways to Understand Basic Estate Planning Terms, we covered five of the most basic definitions of estate planning. Included in those definitions were the terms will and trust. Let’s dig into those a little more. “To will or to trust, that is the question.”

Generally, estate planning takes off in one of two courses. There is the will course. And there is the trust course. Briefly, a will is a document that is created now, takes effect only when the creator passes away, and it ultimately distributes your possessions at the time of your passing. On the other hand, a trust is a document that is created now, goes into effect now, and it ultimately distributes your possessions as a will would, BUT that distribution can happen at different times, and not just at your death.

So, how do you decide between the will or the trust course? There are a number of considerations to take into account. Each consideration should be weighed according to a value you place on it.

Jeppesen Law, PLLC places its emphasis on families with young children. So, that is generally where we would start the discussion. If you have young children, they tend to need the protection of a trust. But, if you are passing your possession on to older, more experienced beneficiaries, then a will is a good option.

  

Do you want to manage how your possessions are deployed after you pass away? Some great examples are provisions encouraging and rewarding beneficiaries for post-secondary education, philanthropic work, or for caring for other people, such as being a stay at home parent. Maybe you are just unnerved by the idea that if you pass away with a minor child, that child will get everything, at the age of 21 and not know how to handle it. If this is a concern of yours, a trust is a great option to consider as it provides great flexibility in distributing your assets throughout the beneficiaries' lifetime.

Privacy - If privacy is a concern, you should know that “where there is a will, there is probate.” We also talked about probate in Super Easy Ways to Understand Basic Estate Planning Terms, as being an open to the public, court process. That means all the information filed with the probate court is available to the anyone who might be curious. Generally, if a trust is done properly and properly maintained throughout the years, you will avoid probate and its public nature.

Cost - This is generally a consideration people take into account. A will costs less upfront. This is true because a will is more simple to create than a trust, but ends up costing more in the long run. The benefit of a trust is that it is a one-time fee, while a will costs you at the beginning and the end during the probate process. If you are a married couple, the total cost of a will and the probate process will more than double the cost of a trust. (See Jeppesen Law's Pricing Schedule).

Organization of your possessions -  A will does not organize your belongings. This is an unfortunate aspect of will based plans. Generally, the person charged in the will to have responsibility over organizing your possessions is a family member. This can be difficult if this person is not the surviving spouse, or it can be difficult if the surviving spouse did not participate in the family’s financial planning. A properly formed trust holds these possessions during your life, so there is no need to “find” them after you pass.

Three other areas worth consideration:

Access to assets - With a trust, generally you have immediate and continuous access to assets. This is true for you during your life and for your named beneficiaries after you pass. However, any possessions distributed through a will technically need to begin the probate process by petitioning the probate court for permission to sell or use any of the assets.

Incapacitation - Trusts are set up to proceed in case of your incapacitation. A will does not have this ability as it is only controlling at your death. A durable power of attorney has a limited time period of coverage for incapacitation. But, any prolonged duration generally requires filing a guardianship proceeding in court.

Challenges - Trusts generally avoid these problems as trusts are private, making it difficult for challenges to be filed. A will and the probate process are public, so anyone claiming an interest may challenge the will.

                There you have it, an absolute beginner’s guide to answering whether a will or a trust is the right choice for you. These are not all the considerations that one might possibly ponder, nor are these very detailed overviews of each consideration. They are just meant to get an absolute beginner to start thinking about these considerations.