Estate Planning Information

When people begin to think about estate planning, they usually focus on having a trust or a will drafted, and indeed this is a common component of a basic estate plan. But there are other estate planning tools that may provide you with more control, greater privacy, less expense to your heirs, and quicker administration after your death. In addition, there are components to an estate plan that focus on you rather than on your property, spelling out how you wish to be cared for in the event of incapacity and who will make decisions on your behalf.

At Knollmiller & Arenofsky, LLP our estate planning lawyers review all these options with clients and develop a plan tailored to your situation, using methods that will result in the outcome you wish. No one is too young to have an estate plan. We encourage clients, whether they have modest estates or substantial assets, to start thinking about what would happen if they died or became incapacitated. What would happen to their money, their children, and their home? Who would make decisions about these matters? We are providing the following brochures to help answer these questions:

Your Personal Guide to Estate Planning explains in detail exactly what is involved in estate planning and why it is important to have an estate plan. A very basic estate plan will include a Last Will and Testament, a Power of Attorney Over Assets, a Durable Power of Attorney for Health Care and a Living Will. Often, a more detailed estate plan will include a Revocable Living Trust. In addition, certain specialized trusts may be included within the Revocable Living Trust or as separate stand-alone trusts. While every trust is specially written to accommodate your individual needs, some of the more common additional types of trusts that may be required for more advanced estate planning are detailed in this pdf document.

irsNew Issues Facing Contemporary Estate Planning for Married Couples explains the change in the thought process and concepts regarding estate planning because of the increased personal estate tax exemption and the ability for a spouse to elect carry over and utilize the unused portion of a deceased spouse’s estate tax exemption. These new
benefits have caused estate planners to rethink estate planning in a new way for many of their clients. Now income tax planning must also be considered.

A Minor Children’s Trust is desirable whenever you have potential beneficiaries who are under the age of 21. It is typically incorporated inside the Revocable Living Trust and will provide guidelines to the persons who will be guardians over your young children and control the property you leave behind to take care of your children. It also provide guidelines to the person controlling the money (the trustee) as to how you want money spent to support your children and what you don’t want money spent on. A well-developed Minor’s Trust is a set of instructions for the person you have chosen to do what you would do if you were still alive and able to raise your children.

A Special Needs (SNT) Trust can be utilized whenever a beneficiary suffers from some disability, such as substance abuse, has a bad marriage, is easily influenced by others, etc. It is typically incorporated inside the Revocable Living Trust. A specific form of Special Needs Trust (Supplemental Needs Trust) is also used when a beneficiary is currently receiving, or will receive, government benefits and can lose such benefits if the person has too much income and/or assets.

A Personal Adult Management (PAM) Trust, also referred to as a “Spendthrift Trust,” is a trust designed to protect the beneficiary from various creditors. It must be established by someone other than the beneficiary and may be included in a Revocable Living Trust. If properly designed and administered, this trust can be established for your beneficiaries (say, your children) and will protect the assets that you leave them from creditor claims in the event the beneficiary of that trust runs into financial problems. This trust can also protect the assets from a spouse in a divorce action (except for certain claims allowed by state law which are generally for child support and spousal maintenance), and the property of this trust can be excluded from the beneficiary’s estate for estate tax purposes when the beneficiary dies.

A Preservation of Assets (PAT) Trust is a trust that is used to preserve and keep an asset intact for use by the beneficiaries. It is most commonly used when a person desires to keep a family business, farm, ranch, cabin, etc. for the benefit of future generations. It may also be used to establish trust fund for future generations to assist them in obtaining a college degree or as an emergency fund to provide security. By delaying time when estate taxes are imposed more assets are available to future generations. Also, with assets in trust, future generations will not lose their property to divorces, bankruptcies, lawsuits, etc.

A Qualified Individual Conduit (QIC) Trust is a stand-alone trust and is not incorporated inside the Revocable Living Trust. It is a specially designed trust that satisfies the guidelines set forth by the Internal Revenue Service for naming a trust as the beneficiary of a qualified retirement account in place of naming an individual as the direct beneficiary. A QIC Trust will assure you that your beneficiaries will not just take the money out of your retirement account and spend it unwisely, finding themselves with a big income tax bill the next April 15th. Also, with a QIC Trust your hard earned retirement assets will not be subject to an aggressive “creditor” in a frivolous lawsuit brought against your beneficiary. (This protection is not available if your beneficiary is directly named as a beneficiary.)