10. You remarried and have children from a previous marriage;
9. You own property in more than one state;
8. Your children do not always get along;
7. You foresee potential issues with your children’s spouses;
6. A loved one is disabled;
5. A loved one has financial difficulties;
4. You are concerned about possible creditors;
3. The most important people in your life and the people you wish to leave a legacy to are friends or extended family;
2. Planning for Medicaid and long-term health care is a priority;
1. You want your estate plan to be carried out without requiring a probate proceeding or court approval;
Wills are sound planning instruments for families that lack any strife and hold assets that are fairly simple and well defined. Families with complicated interpersonal issues or complex assets should consider Trusts. Trusts provide levels of protection and control that are in contrast to the inefficiencies of a Will and the Probate Process. These inefficiencies are exposed when any one of the reasons outlined above appear.
Family relationships are one the biggest drivers of Trust creation. Children that do not get along grow up to be siblings that do not get along. Not getting along in a Will and Probate context means that forms will not be signed and court appearances may be necessary. All of this aggravation serves to frustrate the estate plans of their father or mother.
A new marriage is a fresh start which creates a new family structure. The parents of the betrothed may create Trusts that provide support for the new family or ensure that their children and grandchildren are protected in case the marriage fails. For second marriages, there may be a desire to balance the old family makeup with the new. Leaving money to children from a previous relationship while also providing security to the new spouse is an often-stated goal. While a Will may be able to accomplish these tasks, the Probate Process has built-in opportunities for disgruntled family members to show their displeasure. A Trust will direct assets to the chosen beneficiaries without the need for a court proceeding.
Owning a home in New York and a condominium in Florida was an arrangement favored by generations of New Yorkers. Substitute North Carolina for Florida and the song remains the same. That song is Ancillary Probate or two separate probates. A New York Probate would be required first to appoint an Executor for the deceased New York resident’s property and then the New York documents would be forwarded to the Ancillary Probate state where the other property was being held. Two Probates, two sets of fees and extended timetables. Trusts bring all transferred property under one umbrella and avoid the involvement of multiple courts.
Trusts also offer asset protection for disabled individuals that will be seeking governmental entitlements. Troubled individuals may also be financially supported and maintained through Trusts without granting them direct control over those resources.
Medicaid planning with Trusts is a well-established pre-emptive method to protect property and other assets in case one suffers a long term illness requiring care. Creditors, including Medicaid have better access to Probate estates that are public records than private trusts.
When your support system is made up primarily of friends or extended family, a Will may not be in your best interest if unwanted family members are noticed in a Probate Proceeding as prescribed by New York law and cause problems. Trusts do not automatically invite problematic family members to participate in the disposition of assets after one passes away.
The theme that keeps popping up is the Probate Process and how it can frustrate an estate plan. Trusts have the ability to bypass some of those difficulties and allow you to attain your estate planning goals. Talk to the professionals at Sloan and Feller today about Trust planning.