Estate Planning 101

Subtopic: Stag’s Leap Air Date: June 1st, 2020

We have a saying around the firm of sticking to the basics or returning to basics. The same can be the foundation for estate planning. There’s 4 documents we recommend every client have.

  1. Basic Will – this details your asset distribution at death. You will name and executor in this document
  2. Living Trust – one of the largest misunderstandings on Livings Trusts is that you can prevent estate tax by having one in place. There’s many types of Living Trusts that your attorney may recommend
    1. Rev – in this trust you transfer your assets into the ownership of the trust and you can change (or revoke) this trust any time you feel necessary. Again though, neither your will or this rev living trust will avoid or minimize estate taxes
    2. Irrevocable – This set up allows you to permanently pass your assets into a trust during your lifetime. Because the assets are no longer owned by you, you aren’t subject to estate taxes. These trusts are final. So a lot of planning and decision need to be put into enforcing this type of trust. These can be created during your lifetime, or a via directive at death.
    3. QTIP -or a qualified terminable interest property trust. These are set up so that the grantor (you) are able to direct income (think dividends and interest on an investment account) to ensure your surviving spouse is taken care of over the remainder of their lives. This is ESPECIALLY beneficial in the situation where there are beneficiaries from previous marriages but the grantor passes before the surviving spouse. It ensures stability for that surviving spouse so that assets do not bypass them directly to the beneficiaries.
  3. Declaration of Natural Death – simple, this is the do not resuscitate situation. By having this in place, you remove the stress and responsibility being placed on a friend or family member while under distress
  4. POA’s (healthcare and durable)
    • The differences are the specifics
    • Healthcare is going to be the person making medical decisions on your behalf should you become incapable – you can always have provisions in these so that’s would be an in depth conversation with your attorney on your wants should an event occur that forces this POA to be acted upon
    • Durable is someone able to make financial decisions

What are the benefits of a Trust?

  1. Privacy – avoid PROBATE
  2. Protections – IRREV Trusts
  3. Control of your legacy


A trust allows your assets to avoid probate which is a public legal process that has the potential to create a few issues for your heirs including:

  • Delays– in some cases, this can encumber assets for more than a year
  • Costs– probate can cost up to 5% of the estates value
  • Publicity– if you go the Last Will and Testament route, your document becomes public record. This transparency can not only expose your heirs to targeted solicitation, but also can create turmoil amongst a family should the funds be distributed unequally


Many people who spend their lives accumulating wealth have an intended purpose for that wealth at death. Commonly there’s a focus on heirs, so children or grandchildren, and a charity that person deems worthy. Establishing a trust can provide your wealth the protection it deserves so that funds can be protected and passed properly. Irrev trusts can include language that protects the trusts assets from creditors or a legal judgement against a trust beneficiary. This prevents a circumstance where one beneficiary is unable to maintain a good legal standing and diminishes the assets intended for multiple beneficiaries.


A properly drafted trust enables you to structure asset distributions to beneficiaries.  In fact, these provisions can give you a great deal of comfort knowing that your wishes will be carried out after death.  This can be a very important planning consideration for families where beneficiaries have varying degrees of maturity and financial competence. Some common provisions include:

  • Distributions for specific purposes. For example, you can stipulate that a trust will make money available to their children or grandchildren only for college tuition or perhaps future health care expenses.
  • Surviving spouses often remarry – through this dynamic, your assets could end up unintentionally benefitting a new family. The QTIP trust we discussed earlier can be established to prevent such a circumstance.

Common Mistakes

  1. Beneficiary updates and example
  2. State of residency and properties owned in other states