If you’ve already created a last will and testament, there are certain times when you will want to go back and review the document to determine if any changes are necessary. If you decide to make changes to your will, you can do so by either creating a completely new will or by adding what is known as a codicil. Because laws that govern last wills and testaments differ between states, you should always consult an attorney if you believe you need to make a change to your will.

As long as you remain of sound mind, you can make changes to your will at any time. However, major life events that affect your family or beneficiaries typically require you to at least review your will, if not change it entirely. For example, if you created a will while you were single, you should typically change the terms of your will if you get married. Similarly, if you are married and subsequently become divorced or get remarried, it’s often best to review your will and change it to reflect your new marital situation.

In addition to a change in marital status, having a child or adopting a child should also prompt you to revise your will. In general, you are under no obligation to leave anything to your children, but if you create a will before you have a child and do not subsequently revise it, this may lead to problems in the probate process.

Other situations that may prompt you to review your will include a significant change in the amount of assets you own, the death of a potential heir or beneficiary, the death or incapacitation of the person whom you intended as a guardian or executor, or if more than five years have passed since you last reviewed the document.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Many people put off the need for a will during their lifetime.  If you choose not to create a will, you may assume that your spouse will still be entitled to all of your assets.  The truth is, this may not be the case.  Take a look at the following information, to learn more.  If you’d like to make sure that you’re in control over how your assets are distributed, work with an estate planning attorney to create your will.  If you have any questions about how a will gives you control, contact an estate planning attorney.

Without a will in place, you’re not in full control over how your property is distributed.  If you choose not to create a will, it’s important to think about a few things.  This will help you get a better idea of how your assets will be distributed.

Do you own property jointly with another individual?  If so, this person will be given your assets after death.  This can be a one way to ensure that your spouse will be given certain property.  It’s important to carefully think through this ownership decision because there are pitfalls to joint ownership, even with a spouse.

Additionally, your state laws will determine how your individually owned assets are distributed after death, if you choose not to create a will.  You may assume that your spouse will get most of your assets, but this is likely not the case.  Many state laws, including Arkansas, ensure that children, even minor children, get a significant portion of an individual’s assets.

Take the time to handle your estate planning affairs so that you’re in full control over how your assets are distributed.  By creating a will, you can outline how you wish for your assets to be given away, making it possible for you to leave a large portion of your assets to your spouse.

If you have any questions, or if you’d like to create a will, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

When you create your will, you have the opportunity to name your executor.  This person will handle all of your affairs after your death, including settling your estate.  So it is important to choose your executor, and back-up executor, with care.  You also need to make sure that your executor actually wants to serve; don’t make assumptions.  Take a look at the following information, to learn more.  If you have any questions, or if you’d like to discuss the duties of an executor, meet with an estate planning attorney.

Ask Your Potential Executor if He Wants to Serve

It’s important to avoid possible future issues by discussing your wishes ahead of time.  If you choose to appoint a certain individual as your executor, you should discuss this choice, outlining the executor’s many duties.

Explain all Executor Duties

In many cases, people aren’t prepared for all of the responsibilities that go along with the job.  It’s important to be honest about the duties that are expected of an executor.  Tell your executor that it’s okay to decline if it feels like too much.

It’s Okay for Your Potential Executor to Say, “No”

You may find that your chosen executor isn’t ready for the responsibilities.  If this is the case, you will need to rethink your decision.  No one should accept an important trusted helper role, such as executor, out of obligation or because they are embarrassed to decline.

Appoint a Substitute and Name Back-Ups

Take the time to think through other potential choices, including a back-up executor.  If you name an individual who declines to serve, you won’t be in control of how your affairs are handled unless a back-up is also named.

You never know what your potential executor will be going through at the time you die; sometimes people need to decline to serve because of illness, too many responsibilities, or a move.

Your estate planning attorney can help you prepare for a discussion with a potential executor.  With a little extra effort and care, you can ensure that you’re selecting the best executor, who will be willing and able to handle your future estate affairs.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

We certainly hope that our loved ones will accept our final wishes, but unfortunately, disagreements and old hurts can make an appearance during such an emotional time.  When someone is left out of a will, or feels they did not receive their fair share of an estate, they may contest the will based on one or more of the following:

• The testator, the person who had the will created, lacked the capacity to make a will.
• Another person had undue influence over the testator.
• There was fraud involved before, during or after the will was created.
• There was a mistake in the will – for example, another child was born after the will was drafted.

Who can file a will contest?  Generally, anyone who has a legitimate financial interest in the estate can challenge the will. The person’s financial interest must be considered to be more than speculative. In other words, you cannot contest a will if you were friends with the deceased and think he or she should have left you something. However, if you were not left anything in the will, but would be entitled to something under the state intestacy laws as an heir, then you would be in a position to challenge the will.  Why?  Consider what would happen if you were to win the will contest, the will would be found invalid and the estate would be distributed according to the laws of intestacy to the heirs.  If you would not receive a share under these laws, what would be the point of filing a will contest?

Proper estate planning can help reduce the chances of a will contest, and there are tools an estate planning attorney can use should you worry about a loved one challenging your will.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If you’re beginning to think about your estate planning needs, you may be considering the use of a Will.  A Will allows you to prepare for the future in three ways.  If you’re just beginning your planning, you need to better understand how a Will works.  Take a look at the following information, to better understand this planning tool.  If you have any questions, or if you’d like to execute a will, contact an estate planning attorney.

What can a Will do?

A Will can accomplish many planning needs. With this important document, you can do the following:

• You can outline your wishes for after death property distribution

• You’re able to appoint a guardian for the care of your minor children

• You can appoint a personal representative (executor) to handle your estate affairs

A Will Keeps You in Control

A Will allows individuals to have control over the future.  It’s one of the most important estate planning documents that exists. If you don’t create a Will, you will have no control.  This means that your state laws and the court can determine important issues on your behalf.  Do you want someone else deciding how your assets will be distributed or who will care for your child? If not, you need a Will.

Why You Should Work With an Estate Planning Attorney

If you’re ready to draft your Will, it’s important to work with an attorney.  This will allow you to have a valid and legal Will that meets your needs.  Attempting to create your own Will may mean that you have an invalid Will, and that your wishes won’t be followed.  An estate planning attorney will be able to understand your state’s laws, so that the right document could be created.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

When you’re beginning your estate planning affairs, you may be tempted just to create a will.  While a will is a great planning tool that is especially important, there are many other planning devices to consider.  Take a look at the reasons below, to learn why your will is not the only document that you need.  If you have any questions, or if you’d like to draft a will, or any other document, contact an estate planning attorney.

• A will doesn’t allow you to plan for incapacity.  Unfortunately, medical emergencies can happen at any time.  It’s important to have the right documents in places, so that you can get assistance during your time of need and so that you’re able to have some say in your medical care.  A will is only effective if you’re dead; it doesn’t help with incapacity at all.
• All of the assets controlled by your will are subject to probate.  If you’re looking for a way to keep your assets out of the probate process, you will need to utilize other planning techniques.  This can make it possible to get some of your assets to your beneficiaries more quickly, while maintaining privacy and reducing expenses.
• A will doesn’t allow you to plan for the care of a loved one with special needs.  There are planning techniques that allow you to leave assets to a loved one with special needs.  This can ensure that the money is used appropriate, and that your loved one doesn’t lose his or her Government benefits.
• A will doesn’t help you during your lifetime.  It’s important to remember that a will is only useful after your death.  You should always consider the needs that you may have during your lifetime.  Whether you’re looking to plan for future financial needs, or want to protect your assets during your lifetime, you will need to take a look at other planning tools.

If you have any questions, or if you’d like to review your will, or other planning documents, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If you ever move out of state, it’s important to review your will as well as your entire estate plan with an estate planning attorney licensed in your new state.  This ensures a valid and legal will as well as an up to date estate plan.

Many people completely forget about updating and then find that their plans don’t meet their current state laws or that out of state documents add unnecessary expense and complication.

Take a look at the information below to learn more about the importance of reviewing your will.  If you have any questions, or if you’d like to discuss your will needs, contact an estate planning attorney in your new state.

Each state has its own laws that must be followed when individuals create an estate plan or will.  While your current will may be effective in your new state, you may need to make some legal changes that will allow your will to function efficiently with your new state’s laws.

If you don’t take the steps to review your will, your will may not “work” in your new state.  A will “works” if it does what you want it to do.  Hiring two probate – estate planning attorneys, one in your prior state and one in your new state probably doesn’t “work” for you.  It’s easier and less expensive just to update.

It’s especially important to have your will reviewed if you haven’t looked at it in several years. This will allow you to make updates to meet your current needs as well as make sure that it follows your state’s laws.   Estate plans, including wills, should be reviewed and, likely, updated every three to five years.

If you have any questions, or if you’d like to review your will, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Power of attorney grants the power to a second party, often your child, to make legal and financial decisions for you. It is usually a back up a plan, in case an unexpected accident happens and you are unable to keep your affairs in order.  But what if you are uncomfortable handing over all rights to a child now, under a power of attorney, while you are still capable of managing your own affairs?

Implementing a springing power of attorney could be your solution.

A springing power is a power of attorney that only becomes effective if you (the grantor or person signing the power) become disabled. This approach addresses the exact concern raised. You do not provide powers to your kid as agent until you really need the help, i.e. when you cannot handle matters on your own.

While this sounds seductively good and simple, as the saying goes, the devil is in the details. If you cannot trust your kid while you are alive, well and astute to keep an eye on the kid, why and how can you trust the kid to do right when you’re disabled? Furthermore, the entire concept of a springing power is often questionable. How do you define “disabled” such that the power of attorney springs into effect? There is no simple definition.

What if you have a temporary illness? If you recover, how do you get the financial reins back from junior? All these issues can be dealt with, but they add complexity. Also, do not forget about HIPAA complications. This law imposes strict limitations on the disclosure of medical information. To prove disability, you need to address these
requirements.  Once you get through all that, your kid will have to convince the bank, or other person to accept the power. This is not always so simple.

So, while a springing power can address a common parental worry, it also creates a host of issues. A power effective immediately might mitigate some of the concerns. A funded revocable living trust can provide an even more comprehensive alternative. The bottom line is, even a power of attorney, which too many people dismiss as “simple” and “standard” process, is fraught with issues that you should only ignore at
your own peril.

For answers to your estate planning questions, contact the Deborah Sexton Law Office at (479) 443-0062 or www.arkansas-estateplanning.com.  Deb offers free half-hour consultations.

This information is brought to you by Martin M. Shenkman, CPA, PFS, MBA, JD, AEP® through the NAEPC Foundation. 

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

There are many different varieties of wills and trusts to fit the needs of each individual.  Only a qualified attorney should draft these documents.  To give
you an idea of the options available to you, please see the below common definitions of several types of wills and trusts.  If you have further questions, please contact the Deborah Sexton Law Office at (479) 443-0062 or www.arkansas-estateplanning.com.
Deb offers free half-hour consultations.

Basic will:  A basic or simple will generally gives everything outright to a surviving spouse, children or other heirs.

Will with contingent testamentary trust:  Frequently, married couples with minor children will pass everything to their spouse, if living, and if not, to a trust for their minor children until they become more mature.

Pour-over will:  The so-called “pour-over” will is generally used in conjunction with a living trust.  It picks up any assets that were not transferred to the trust during the
person’s lifetime and pours them into the trust upon death.  The assets may be subject to probate administration, however.

Tax-saving will:  A will may be used to create a testamentary credit shelter trust.  This trust provides lifetime benefits to the surviving spouse, without having those trust assets included in the survivor’s estate at his or her subsequent death.

Living trust without tax planning:  Generally, the surviving spouse has full
control of the principal and income of this type of trust.  Its main purpose is to avoid probate.  If required, the trust can also be used to manage the assets for beneficiaries who are not yet ready to inherit the assets outright because they lack experience in financial and investment matters.

Bypass trust:  This type of trust avoids probate and allows the first spouse to die of a married couple to set aside up to $5,000,000* in assets for specific heirs while  providing income and flexibility to the surviving spouse.  The appreciation on assets in the trust can avoid estate tax.

QTIP trust:  A type of trust known as a QTIP trust allows the first spouse to die to specify who will receive his or her assets after the surviving spouse dies.  Use of a QTIP also permits the deferral of death taxes on the assets until the death of the surviving spouse.

QTIP means “qualified terminable interest property.”  The income earned on assets in a QTIP trust must be given to the surviving spouse for his or her lifetime.  After the death of the surviving spouse, however, the assets then pass to beneficiaries chosen by the first spouse to die, frequently children of a prior marriage.

Qualified domestic trust:  Transfers at death to a noncitizen spouse will not qualify for the marital deduction unless the assets pass to a qualified domestic trust (QDOT).  The QDOT rules require a U.S. Trustee  (unless waived by the IRS) and other measures that help ensure collection of a death tax at the surviving noncitizen spouse’s later demise.

For more information or to set up a free half-hour consultation, contact the Deborah Sexton Law Office at (479) 443-0062 or go to www.arkansas-estateplanning.com.

Note:  Additional trusts may be used for current income tax savings or to remove life insurance from the taxable estate, but the above-described documents are generally at the center of a person’s estate plan.

*The applicable exclusion amount is the dollar value of assets protected from federal estate tax by an individual’s applicable credit amount.  For 2011, the applicable  exclusion amount is $5,000.000.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

While working on your estate planning, you may consider a number of documents, including a revocable living trust and a will.  Are you confused about the differences and similarities between these two legal documents?

Take a look at some of the information below to learn a little more about each document.  You will find that both documents are extremely beneficial estate planning tools.

What does a will allow you to do?

A will allows you to do three main things.  You’re able to decide how your assets will be distributed to the beneficiaries of your choice after your death.  You’re also able to appoint an executor who will be responsible for handling your estate’s affairs and managing and distributing your assets.  Additionally, you’re able to appoint a guardian for the care of your minor children.  During your lifetime, you’re able to make changes to your will so long as you’re well.

Here’s a breakdown of some important things that set this document apart from a revocable living trust:

• A will is a document that becomes effective after your death
• A will’s assets are subject to the process of probate.  This very public process can be extremely costly and timely.
• A will is not able to be used during your lifetime.

What does a revocable living trust allow you to do?

Similarly to a will, a revocable living trust allows you to choose how some of your assets will be distributed after your death.  With this trust, you hold certain assets in your trust and determine how they will be distributed to your beneficiaries.  This trust can be changed at any time you are alive and well.

A revocable living trust is used after your death and or during your lifetime.  You will name a successor trustee to manage your trust’s affairs after your death.

Here’s a breakdown of some important things that set this document a part from a will:

• You’re unable to appoint a guardian for your children in your trust.
• The assets in your trust are not subject to probate, which means that your affairs will remain private.
• You’re able to appoint a successor trustee who will be able to handle your trust’s assets and affairs if you become incapacitated.

As you can see, each document has its benefits.  You actually likely need both.  If you have any additional questions about using a revocable living trust and or a will, consult with a qualified estate planning attorney.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.