Estate planning is the creation of a definite plan for protecting your assets while you are alive and distributing them after your death. Your estate includes anything that you own, such as real estate, business interests, personal property, bank accounts, retirement accounts, life insurance proceeds, and payments that are owed to you.
At Troyer & Good, PC each client is guided through the estate planning process with a close evaluation of his or her unique goals and desires, family dynamics, and current and projected estate tax liability.
At a minimum, the following documents are the necessary components of an estate plan:
Last Will and Testament/Trust
Power of Attorney
Advance Directives for Health Care
Instead of listing who you want to receive your tangible personal property in your Will, the Indiana Probate Code allows for the use of a separate memorandum to distribute your tangible personal property.
Your Will must reference this memorandum so that it can take effect. Below is a sample form that we provide to our clients after we have prepared their Last Will and Testament to distribute their tangible personal property:
Tangible Personal Property:
Your property that can be touched or felt, such as furniture, jewelry, vehicles, or artwork
Click the PDF to download your free form
Something else you can accomplish with your estate plan is charitable giving. Charitable giving creates a legacy that can last for many years to come. There are many ways that you can leave a lasting legacy by giving to your favorite charity.
Find out how our firm can help you incorporate charitable giving in your estate plan.
What do I need to bring to an appointment? If you have any current estate planning documents drawn up, you can bring those to your appointment. You should also have a good idea of your assets and liabilities. We will need the legal names of anyone you wish to name in your documents.
What is an “Estate”? There are two ways of defining an estate. The “probate estate” includes all property which is in your sole name at the time of death, whether real estate, tangible personal property such as cars, furnishings, and jewelry, or intangible personal property such as stocks, bonds, mutual funds, bank accounts, etc. The “taxable estate” includes not only the probate assets, but can also include jointly owned assets, P.O.D. accounts, retirement plans, life insurance, annuities, Trust assets, or anything else in which you held an interest at death.
What is a Will and do I need one? A Last Will and Testament is a formal legal document where you decide exactly how and in what portion you want your assets and property to be distributed upon your death. You can choose any number of recipients of your property, whether they be family members, friends, or charities. Without a Will, your estate will be distributed according to the Indiana laws of intestacy. In a Will, you decide who will be the person in charge of administering your estate, called the “Personal Representative.” Another decision you make in a Will is determining how final expenses and taxes are paid. An important aspect of a Will for parents is the ability to designate a guardian for your minor children. Without a Will expressing your wishes, the Court will choose who is appointed as guardian for your children. The Wills we prepare at Troyer & Good, PC also provide you with the opportunity to make a handwritten list of your wishes for your jewelry, furniture, family heirlooms, etc. This list is called the “Memorandum of Personal Property” and is available for download on our website. You can add to the memorandum at any time without the formality of signing a new Will. Because we refer to it in your Will, it is legally enforceable upon your death. Without a Will, such a letter or memorandum would not hold up in court.
Is a Living Will the same as a Last Will and Testament? No, they are not the same document. Your Last Will and Testament is a document that directs what happens to your property, bank accounts, stock, CDs, and other assets when you die. You specify amounts of money or certain property to the named individuals or charities in your Will. On the other hand, a Living Will has nothing to do with what happens to your assets after you die. A Living Will is a legal document that lets your doctors and family know your desires regarding medical treatment at an end of life situation.
Should I consider a Trust? Maybe. Trusts can be an important estate planning tool for some people. Trusts may be inappropriate for others. Like a Will, a Trust can be used to direct how your estate assets will be distributed. A Trust can be set up during your lifetime or at the time of your death. Some advantages of a Trust include planning to minimize taxes, protecting assets for minors, providing for a scheduled payout over a period of time, and shielding assets from your beneficiaries’ creditors. In addition, a Trust which is set up during your lifetime (a living Trust) will avoid probate administration of Trust assets and maintain confidentiality since the Trust, unlike a Will, won’t be made a part of the public record. Also, a Trust can be used during your lifetime to manage assets in the event that you become incompetent or simply wish to turn things over to another individual or professional trustee.
What type of Trust do I need? There are different types of Trusts and each one accomplishes a unique purpose. A Testamentary Trust is created in your Will and becomes effective when you die. A Living, Trust is created during your lifetime, funded during your lifetime, and used to manage assets before your death as well as after. A Revocable Trust means that you keep the power to change the Trust. You can modify any part of the Trust at any time or even completely revoke it if you choose. Upon death, most Trusts become irrevocable, making your wishes permanent at that time. An Irrevocable Trust generally means that you cannot change or revoke the Trust. (Amendments can be made by the Trustee, but it is more difficult than amending a Revocable Trust). In some cases, an Irrevocable Trust is preferred for tax or Medicaid planning purposes.
What else do I need to make my Estate Plan complete? During your lifetime, it is important for you to make your wishes known regarding what happens if you become incapacitated. With a Power of Attorney, you can choose an individual who will step in and handle your financial affairs during the times you are unable to do so for yourself. Without a Power of Attorney, it may be necessary at some point to initiate the expensive process of having the court declare you “incompetent” and appoint a guardian for you. Most people would also like to make their wishes known regarding who is to make health care decisions for them and whether or not they would like heroic measures to be taken when their death is imminent. You can do so by signing Advance Directives for Health Care, which include choices regarding your Health Care Power of Attorney, Living Will, and Health Care Representative.
When should I update my Estate Plan? You may need to update your estate plan if any of the following apply:
Does your Will or Trust include a credit shelter or bypass trust for federal estate tax?
Have there been any births, deaths, marriages, or divorce which change your estate plan?
Has your financial situation changed significantly?
Is it necessary to create a trust for any family member because of minority, incapacity, or divorce?
Are you anticipating the need to enter an assisted living facility or nursing home?
Do you want your assets to be distributed in a different way from what is called for in your Will or Trust?
Has any of the property specifically described in your estate planning documents been sold, lost, or otherwise disposed of?
Have you mortgaged, sold on land contract, or leased any real property described in your estate planning documents?
Have you acquired any real property in another state?
Do you need or want to change your named Personal Representative (Executor), Trustee, or Guardian?
Do you need or want to change the appointments in your Power of Attorney or your Advance Directives for Health Care?
Have you named a Trust as the beneficiary of an IRA?
Some circumstances would not warrant updating your estate plan. For example, if you named your daughter in your documents and she got married, you would not necessarily need to update your documents because her last name changed. However, if the marriage affected who you named in your documents and how you want your assets distributed, then you should update your estate plan. Also, if you moved to a new home (in the same state), you may not need to update your estate planning documents.