Estate Planning Process | Promise Law


Estate Planning

What if someone didn’t create an estate plan and they’re now incapacitated?

In these circumstances, a petition must be filed with the circuit court to request a guardianship and/or conservatorship of the person.

I’m not wealthy. Why do I need an estate plan?

An estate plan prevents wasting whatever assets you do have on court petitions for adult guardianship at your incapacity and minimizes expense and delay in handling your affairs at your passing. A well-thought-out estate plan gives clear direction to your loved ones and reduces their burdens during those already difficult times.

Do I need an estate plan if I already have a will?

Yes. A will only addresses administration at your death. Your family has no ability to manage affairs during your lifetime with a will alone.

Can’t I just add my spouse or children to my accounts as a joint owner and let them manage things that way?

No. The joint owner can only act with respect to the account where they’re named. If any legal or financial matter needs handled outside of the account, your family may have to pursue adult guardianship. Also, the joint account becomes subject to the creditors of all the owners, and this arrangement may unintentionally disinherit beneficiaries under your will because the accounts usually transfer to the surviving owner.

What is a trust?

A trust is a distinct legal entity you create by signing a trust document. After it’s created, you transfer most of your assets into the trust or have assets pay on death to the trust. You are your own trustee and can change your trust terms at any time during your life. After your death, the trust is managed by the successor trustee that you’ve named and the assets will pass to your beneficiaries.

Is a trust better than a will?

Yes. Trusts provide a seamless transition for management of your finances if you are incapacitated during your lifetime. Trusts are also private. At your passing, the successor trustee doesn’t have to file anything with the court and as a result the administration process is more efficient than probate.

What is the difference between an adult guardianship and adult conservatorship?

A guardian is appointed to make personal decisions, including medical decisions, for incapacitated adults. A conservator handles an incapacitated adult’s finances.

Can’t we just have the incapacitated person sign estate planning documents and avoid court?

No. It isn’t enough that they know their name or can physically sign their name. “Incapacity” refers to an inability to receive and evaluate information in order to make reasoned decisions. Also, estate planning documents aren’t valid if signed by someone who doesn’t understand them.

I’ve made decisions for my special needs child his whole life. Do I still have to petition the court?

Yes. It may be the case that care providers are still letting you act, but what if they retire, or you need services with a care provider who doesn’t know you? Also, remember that because this child can’t make his own estate plan, you’ve got to do that for him by being appointed as guardian and nominating who should serve when you can’t.

Probate & Estate Administration

My family member just died. Doesn’t someone have to be appointed by the court to probate their estate?

Not necessarily. Whether you need probate depends on the type of assets and the value of the assets owned by the deceased family member.

What is the work of the executor?

There are many duties for this fiduciary. They must give notice to heirs and beneficiaries, file an inventory and prepare annual accountings. There are other rules about when and how assets may be distributed. Especially if an estate appears to be insolvent (more debt than cash) the executor must be very careful in handling the assets or risk being personally liable.

My husband died and left me out of his will. Is there anything I can do?

Yes. Unless you waived your rights in a marital agreement you have certain statutory protections you can assert against the estate. These protections are time sensitive and require action on your part. You should consult with an attorney right away.

What will happen to my minor children if I die?

If parents of children who are under the age of 18 die, then the court will typically appoint the guardian nominated in the parents’ will. If there is no will, the court chooses a guardian that appears to be the best choice to raise the child.

As an agent, am I okay if I handle things for an incapacitated adult the way they would’ve done?

No, probably not. A person can do whatever they want to with their own money, but an agent, trustee, or conservator, etc. is duty-bound to act prudently and in the best interests of the incapacitated person. For example, even if the incapacitated person gave gifts of cash to grandchildren with regularity, you can’t do so without proper authority.

I’m a trustee for someone who just died. What’s my first step?

Identify and secure assets held in the name of the trust. You must also look closely at the trust document to understand what you may or must do, but there are statutory default rules governing a trustee’s duties. In other words, reading the trust document alone may not be enough.

Special Needs & Medicaid Planning

I need nursing home care, but can’t afford it. Do I have to sell my house?

Maybe. This is really a question about qualifying for long term care benefits under Medicaid. The answer depends on whether you’re married, the care needs of your spouse, and your (and if you’re married your spouse’s) income and assets.

I don’t need long term care now, but worry what will happen if I do in the future. When do I need to start planning?

It is helpful to discuss long term care needs when you’re planning for retirement. Advance planning generally provides more flexibility than crisis planning, although crisis planning is better than no planning. Making sure your estate plan is complete is essential to giving you tools for crisis planning.

We didn’t plan in advance. Now what?

It’s never too late to plan, and it is helpful for the other family members to know what to expect as care needs and expenses increase. If the individual who needs care is not competent to participate in the planning and did not complete an estate plan, then court authorization (via adult guardianship) may be required to implement a plan, but planning can still occur.

What can I do to protect my special needs child when I’m gone?

You must complete your estate plan and pursue adult guardianship for this child. In this way, there will be tools for managing your assets to assist the child at your incapacity or death, and there will be a person in place to make decisions for your child when you can no longer do so.

What’s the difference between Special Needs Planning and Long Term Care Planning?

The two are interrelated although Special Needs Planning tends to focus more on individuals with disabilities who are under the age of 65 years old and who may still be active and independent in the community or living with their parents, while Long Term Care Planning generally (but not always!) involves individuals who are 65 years old or older.

Do I need to know if I need Medicaid Planning or Special Needs Planning before I call to set an appointment?

Not at all! Call us for an appointment and we will be sure that you meet with an attorney who can discuss your needs.

If your question wasn’t answered above, please give us a call at 757-690-2470 or contact us online. We’re here to help with everything you need for everything that matters.