did-you-know? rent-now

Rent More, Save More! Use code: ECRENTAL

did-you-know? rent-now

Rent More, Save More! Use code: ECRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

9781119832188

Wills & Trusts Kit For Dummies

by
  • ISBN13:

    9781119832188

  • ISBN10:

    1119832187

  • Edition: 2nd
  • Format: Paperback
  • Copyright: 2021-11-02
  • Publisher: For Dummies
  • Purchase Benefits
  • Free Shipping Icon Free Shipping On Orders Over $35!
    Your order must be $35 or more to qualify for free economy shipping. Bulk sales, PO's, Marketplace items, eBooks and apparel do not qualify for this offer.
  • eCampus.com Logo Get Rewarded for Ordering Your Textbooks! Enroll Now
List Price: $32.99 Save up to $0.03
  • Buy New
    $32.96

    USUALLY SHIPS IN 3-4 BUSINESS DAYS

Summary

Enjoy peace of mind knowing that your assets will pass to your family according to your wishes

Regardless of your age or income, writing a legal will is one of the greatest gifts you can give your family. But where do you begin? Wills & Trusts Kit For Dummies walks you through the most important considerations to have in mind when you’re deciding what will happen to your estate when you’re gone.

Writing a will or setting up a trust isn't as fun as binge watching the latest hot web series, but this book makes the task a little less daunting. Find out who needs a will or trust (spoiler alert: everyone!), when you should create one, and how to take the first steps. Handy online content includes practical worksheets, forms, and templates that simplify and explain the process of estate planning in language that doesn't require a legal education to understand. With the help of Wills & Trusts Kit For Dummies, you'll have a document that details your final wishes before you know it.

  • Navigate probate, tax, and state laws that govern how property is passed to the next generation
  • Avoid the most common estate planning pitfalls and mistakes
  • Choose qualified professionals and specialists to help you make the best decisions for your family
  • Designate a guardian for your children and plan for their financial needs

You deserve to know that your loved ones will be properly taken care of when you’re no longer with them. Wills &Trusts Kit For Dummies delivers straightforward guidance and peace of mind on a subject that, sooner or later, we all must face.

*Please reference the Introduction to access a webpage where you will find a number of downloadable files and forms to create a will, living trust, living will, durable power of attorney, and healthcare proxy.*

Author Biography

Aaron Larson is an attorney practicing law in Ann Arbor, Michigan. He formerly worked for the Institute of Continuing Legal Education, where he developed professional education programs for lawyers in areas including estate planning. He operates the ExpertLaw website.

Table of Contents

Introduction 1

About This Book 1

A Special Note for Residents of Louisiana 2

Conventions Used in This Book 2

Foolish Assumptions 2

Icons Used In This Book 3

Beyond the Book 3

Where to Go from Here 4

Part 1: Getting Started With Your Will or Trust 5

Chapter 1: Ensuring That Your Last Wishes Are Honored 7

The Good, the Bad, and the Ugly: What Can Happen When You Don’t Plan Your Estate 8

Reaping the Benefits of Planning Your Estate 9

Planning for your care while you’re alive 9

Ensuring that your assets go where you want 10

Making things easier for your family 11

Looking Out for Common Pitfalls 12

Benefits and dangers of jointly titling real estate, property, and bank accounts 12

Benefits and dangers of having your assets “pay or transfer on death” 13

Benefits and dangers of life estates 14

Danger of subjecting an asset to Medicaid spend-down rules 15

Potential for increased tax exposure 17

Realizing What Happens If You Don’t Have an Estate Plan 17

Following the laws of intestate succession 18

Determining the custodian of your minor children 18

Creating Your Will or Trust 19

Deciding who should create it 20

Understanding the process 20

Thinking about your kids, money, life insurance, and more 22

Telling Your Family about Your Estate Plan 23

Chapter 2: Making Crucial Decisions 25

Going It Alone 25

Are you comfortable doing it yourself? 26

How complicated is your estate? 26

Choosing a Will or Trust for Your Estate 29

What a will can do for you 29

What a trust can do for you 30

You may benefit from having both 31

Going with a Pro 31

How lawyers and accountants can help 32

Do you save money in the long haul? 32

Working with a Professional 34

Hiring a lawyer 34

Meeting with your lawyer 35

Reviewing and executing the documents 35

Taking the final steps 36

Safeguarding Your Estate Plan 37

The problem of the disappearing document 37

Storing your will or trust 39

Registration of wills and trusts 39

Chapter 3: Gathering Pertinent Information 41

Asking Yourself Some Basic Questions 41

Identifying Your Assets 42

Real estate 44

Personal property 45

Titled personal property 46

Savings 46

Investments 46

Insurance policies and annuities 47

Retirement savings 47

Pensions 48

Considering Community and Jointly Owned Property 48

Valuing Your Property 50

Chapter 4: Planning Your Bequests 53

Calculating Your Assets 53

Determining Your Intended Heirs and Beneficiaries 54

Individuals 55

Institutions or charities 57

Other bequests 57

Thinking about Your Family Circumstances 57

Talking to your family 58

Jealousy and rivalry 59

Pressure from your family 59

Property That Pays or Transfers on Death 60

Estate Planning for Second Families 61

Giving your new spouse a life estate 62

Using trusts to hold your assets 63

More tools to consider 64

Estate Planning for Your Business 65

Inheritance of your sole proprietorship 67

Inheritance of your share of a business 68

Appointing the People Who Will Carry Out Your Estate Plans 68

Choosing your personal representative or trustee 69

Choosing a successor 71

Discussing your estate plan with your helpers 71

Finding Professionals to Assist You 72

Getting help from a lawyer 72

Hiring an accountant 73

Using professional trust services (institutional trustees) 73

Chapter 5: Providing for Your Children and Dependents 77

Choosing a Guardian 77

Making the decision 78

Choosing a guardian other than the noncustodial parent 79

Managing Your Child’s Assets 80

Providing for Your Child’s Needs 81

Your child’s education 81

Your child’s special needs 84

Your child’s financial stability 85

Chapter 6: Dipping into Your Pocket: The Tax Man (and Others) 87

Tallying Up Your Estate’s Tax Liabilities 88

Federal estate taxes — a moving target 88

The generation-skipping transfer tax 89

State estate taxes 90

Gift taxes 91

Minimizing Tax Costs and Liabilities 93

Leaving your estate to your spouse 94

Making gifts 95

Using trusts to avoid estate taxes 96

Creating a Family Limited Partnership 97

Seeing the Big Picture: Tax Avoidance Should Not Dictate Your Estate Plan 99

Paying Your Estate’s Debts 99

Medical costs and Medicaid reimbursements 101

Payment of bills, loans, and mortgages 103

Payment of funeral expenses 103

Covering Administration Costs 104

Court costs 104

Legal fees 104

Administrator’s fees 105

Trustee’s fees 106

Part 2: Everything You Need to Know About Wills 107

Chapter 7: Writing and Signing a Will 109

Deciding Whether a Will Serves Your Needs 110

Simplicity often leads you to a will 110

Assets not covered by a will 111

Exploring the Types of Wills 113

The statutory will 114

The handwritten (holographic) will 114

A will of your own 114

Other wills 115

Elements of a Will 117

Who you are 117

What are your assets 118

Who are your beneficiaries 119

What are your bequests 119

Reference to a tangible personal property memorandum 122

What happens with the residue (if any) of the estate 122

Payment of debts by the estate 123

Describing your funeral and burial wishes 123

Designating a personal representative 124

Designating a guardian for any minor children 124

Your signature 124

Executing a Valid Will 125

Choosing the right witnesses 125

Signing and executing your will 125

Chapter 8: Navigating the Land Mines 127

Identifying Common Land Mines 127

Disinheriting heirs, known and unknown 128

Avoiding invalidating part or all of your will 132

Lashing out from beyond 136

Handling simultaneous death of spouses 137

Realizing Why You Must Update Your Will 138

Your goals and wishes may change over time 138

Your assets may change over time 138

Family changes may invalidate your will 140

Family changes may dramatically alter who inherits under your will 140

Knowing What to Do If You Lose Your Will 143

Chapter 9: When You Already Have a Will 145

Reviewing and Updating Your Will 146

Changes in your family circumstances 146

Changes in your wishes 149

Changes in your financial situation 150

Changing Your Will 152

Adding to your will (amendment by codicil) 153

Executing a valid codicil 154

Revoking Your Will 154

How to revoke a will 155

What to do with a revoked will 155

Chapter 10: Estate Administration: What Happens in Probate Court 157

Navigating Probate Court 157

Discovering How Estate Size Affects Probate Procedures 158

Probate for small estates 159

Probate for larger estates 160

Understanding the Role of the Personal Representative 160

Giving notice to legal heirs 161

Collecting property for distribution 162

Notifying and paying creditors 162

Distributing bequests 163

Hiring a Lawyer 163

Overseeing Probate: The Judge 164

Avoiding Will Contests 165

Validity 166

Mental incapacity 167

Undue influence 168

Part 3: Trust me! How Trusts Work 171

Chapter 11: The Anatomy of a Trust 173

What’s a Trust and Why You Need One 173

Benefiting from Trusts 174

They’re flexible 174

You can provide for your incapacity 176

You can avoid taxes 176

You can avoid probate 177

A trust can help protect your privacy 178

Selecting a Trustee 178

Choosing Your Beneficiaries 181

Transferring Assets into Your Trust 181

Staying in control 182

Giving (or limiting) your trustee powers 182

Cancelling the trust 183

Distributing trust assets 183

Putting Your Trust into Effect 184

When the Trust Ends 186

Chapter 12: Dead or Alive: Picking Your Trust 187

Why So Many Choices? 187

The Revocable Living Trust 188

The benefits 189

Possible drawbacks 190

Choosing from Other Trusts 192

Trusts to avoid the tax man: Asset protection trusts 193

Trusts for people who can’t manage money: Spendthrift trusts 194

Trusts for doing good: Charitable trusts 195

Trusts to avoid gift taxes: Crummey trusts 196

Trusts for people who receive government benefits: Special needs trusts 197

Trusts to protect your estate plan if you predecease your spouse: Bypass trusts 198

Trusts where you control the trust assets 199

Trusts that own life insurance: Irrevocable life insurance trusts (ILITs) 202

Trusts for multiple generations: Dynasty trusts (generation-skipping trusts) 203

Trusts to postpone estate taxes: Qualified terminable interest property trusts (QTIPs) 204

Trusts for your pet 204

Deciding Which Trust Is Right for You 205

Serving your personal needs 205

Serving the needs of your family 206

Thinking about the tax man 207

Chapter 13: When You Already Have a Trust 209

Creating the Trust Isn’t the End of the Story 209

Transferring Assets into Your Trust 210

Real estate 210

Financial accounts 211

Other assets 212

Reviewing Your Trust 212

Does the trust still serve your needs? 213

Does the trust still fulfill your goals? 213

Is the trust adequately funded? 214

Amending Your Trust 214

Restating a Trust 216

Revoking a Trust 216

What Happens If You Die? 217

Can you avoid probate? 217

Should you also have a will? 218

Part 4: Carrying Out the Intent of Your Will and Trust 219

Chapter 14: Planning for Your Incapacity 221

Planning for Incapacity Has Many Benefits 221

You avoid guardianship and conservatorship proceedings 222

You get to choose who cares for you 222

You ensure that your wishes are followed 223

Drafting a Living Will 223

Discussing your wishes 225

Executing a living will 226

Distributing copies of your living will 227

Reviewing your living will 228

Looking into Other Advance Directives 228

Healthcare proxies 228

Your medical advocate 229

Special instructions: Your wishes for your care 231

Executing a Healthcare Proxy 234

Distributing copies of your healthcare proxy 234

Revoking a healthcare proxy 234

Designating Your Financial Powers of Attorney 235

Selecting power of attorney 236

Deciding between durable powers of attorney or periodic renewal 237

Power now or power later? 238

Drafting your durable power of attorney 239

Executing power of attorney 242

Revoking a power of attorney 242

Chapter 15: Those Cushy Retirement Funds 245

Exploring Retirement Savings Accounts 245

Retirement savings accounts available to anyone 247

Employment-based retirement savings accounts 248

Self-employed retirement savings accounts 249

Putting Off the Tax Man 252

Moving Assets from One Tax-Deferred Investment to Another 252

Designating a Beneficiary 253

Selecting your beneficiary 254

Changing your beneficiaries 256

Maintaining Control Over Your Accounts 256

The Tax Consequences of Putting Your Retirement Savings into Your Estate 257

Chapter 16: Life Insurance: Making Sure It Doesn’t Backfire 259

Taking a Look at the Different Types of Life Insurance 259

Term life 261

Whole life 261

Universal life 262

Variable life 262

Deciding Who Owns the Life Insurance 263

Ownership by a spouse 264

Ownership by a child or children 264

Ownership by a qualified plan 265

Ownership by a trust 265

Designating Beneficiaries for Your Insurance Policy 266

Spouse 267

Child or children 267

Another individual 268

Multiple beneficiaries 268

A trust 269

Your estate 269

Chapter 17: Your Castle: How It’s Owned Makes a Huge Difference 271

Ownership of Your Residence 272

Ownership by one person: Sole ownership 272

Ownership by two or more people 273

Life estates 274

Community property laws 275

Special issues for domestic partners 275

Should Ownership of Your Home Be Held by Your Trust? 276

The Drawbacks Of Adding Your Heirs to the Title 277

The cons outweigh the pros 277

Possible tax consequences 279

Possible Medicaid consequences 279

Leaving Real Property by Will or Trust 280

Remembering Other Properties 281

Vacation properties 281

Investment properties 282

Business real estate 282

Farmland 283

Part 5: The Part of Tens 285

Chapter 18: Ten Common Will Mistakes 287

Not Updating Your Will 287

Being Too Specific in Your Bequests 288

Forgetting to Address the Residue of Your Estate 290

Leaving Everything to Your Spouse 290

Leaving Nothing to Your Spouse 291

Including Items in Your Will That Pass Outside of Your Estate 291

Improper Witnessing of Your Will 292

Losing Your Will (or Making It Impossible to Find) 292

Forgetting to Leave Good Financial Records 293

Forgetting That Your Estate Needs Cash 293

Chapter 19: Ten Reasons to Have a Trust 295

You Avoid Probate 295

You’re Prepared for Incapacity 296

You Avoid a Will Contest 297

You Protect Your Heirs 298

You Can Protect Estate Assets from Creditors and Lawsuits 298

You Plan for Second (and Third, and Fourth) Marriages 299

You Plan for the Future of Your Business 299

You Can Transfer Real Property Located in Another State 300

You Have Continuity of Investments 300

You Avoid Taxes 301

Chapter 20: Ten Tax Traps to Avoid When Planning Your Estate 303

Not Planning Your Estate 303

Focusing Too Much on the Estate Tax 304

Assuming that the Estate Tax Will Not Change 305

Trying to Guess How the Estate Tax Will Change 306

Not Taking Advantage of Your Lifetime Gift Exclusion 307

Not Engaging in Business Succession Planning 307

Hiding Property Transfers and Gifts from the IRS 308

Having Your Estate Be the Beneficiary of Your Life Insurance 309

Not Preparing Your Estate to Pay Any Estate Tax Owed 310

Forgetting That Your Estate Will Grow Over Time 311

Part 6: Appendixes 313

Appendix A: State Signing Requirements 315

Alabama 316

Alaska 316

Arizona 316

Arkansas 317

California 318

Colorado 318

Connecticut 319

Delaware 319

Florida 320

Georgia 320

Hawaii 321

Idaho 321

Illinois 321

Indiana 322

Iowa 322

Kansas 323

Kentucky 323

Louisiana 324

Maine 325

Maryland 325

Massachusetts 326

Michigan 326

Minnesota 326

Mississippi 327

Missouri 327

Montana 328

Nebraska 328

Nevada 329

New Hampshire 329

New Jersey 330

New Mexico 330

New York 330

North Carolina 331

North Dakota 332

Ohio 332

Oklahoma 333

Oregon 333

Pennsylvania 334

Rhode Island 334

South Carolina 335

South Dakota 335

Tennessee 336

Texas 336

Utah 337

Vermont 337

Virginia 337

Washington 338

West Virginia 338

Wisconsin 339

Wyoming 340

Appendix B: State Inheritance Taxes 341

The Impact of Federal Estate Tax Reform 342

States That Don’t Tax Estates 342

States That Impose Only Inheritance Taxes 343

States That Impose Only Estate Taxes 343

States That Impose Both Estate and Inheritance Taxes 344

Appendix C: Estate Planning Worksheet 345

Estate Plan 345

Personal information 345

Goals and priorities 346

Family information 346

Assets 351

Debts 354

Bequests 355

Your advisors 356

Estate planning documents 356

Will 357

Personal representative 357

Guardian for minor children 358

Bequests 359

Estate taxes 360

Disinheritance 361

Trust provisions 361

Funeral and burial arrangements 362

Living Trust 363

Trustees and alternates 363

Property to transfer into trust 364

Disinheritance 365

Distribution of trust assets 365

Conditions on distribution 366

Special concerns 367

Durable Power of Attorney 367

Choice of agent 367

Powers granted 368

Preferences for the sale of property 368

Healthcare Proxy 368

Choice of medical advocate 369

Living Will 370

When should treatments cease 370

Treatments that may prolong life 371

Comfort and pain relief 371

Place of death 372

Index 373

Supplemental Materials

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

Rewards Program