As a Single Person, Do I Really Need an Estate Plan? The Answer: Yes.
One of the biggest misconceptions about estate planning is that it is only important for those who are married. Estate Plans for singles ensures that your assets and responsibilities are properly assigned to the right people. In fact, while estate planning might be a little more complex for single individuals, it is just as crucial.
Continue reading to learn why.
What Happens Without an Estate Plan or Will?
By law, the individual’s parents are the next-of-kin and will be responsible to carry out their child’s legacy wishes and distribution of assets. Unfortunately, their parents may not be in a position to take on that additional responsibility. Maybe the individual would have preferred someone closer in age, such as a sibling. Unfortunately, neither the family nor the Court would have any way of knowing this without a documented estate plan or will.
Is there a “Default” Plan for Singles?
Yes. The State of Wisconsin has a “default” plan for dealing with a single person’s incapacity or death. However, it is even less likely to resemble their desired outcome than with married individuals. This is why, in part, it is even more important for singles to execute financial and health care powers of attorney than it is for married individuals.
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Control Your Assets – IRA’s, Life Insurance, Real Estate & Bank Accounts
With an Estate Plan, assets that name a specific beneficiary, such IRA’s or life insurance will be distributed to the chosen person(s) named. Nevertheless, assets that do not have beneficiary designations, such as real estate, bank or brokerage accounts, will go through the probate process and Wisconsin law will control those benefits.
What if I have Children?
If the deceased had children, the assets will go to the children, who will then receive their inheritance outright or when they reach age 18. If the deceased did not have children, his or her parents will be the beneficiaries.
What Happens Without a Named Beneficiary?
If the parents are also deceased, then siblings, or even nieces and nephews, will receive the estate, which may not be what was intended. If any of these individuals receive government benefits, this unplanned inheritance will almost certainly interfere with those benefits. This is another reason estate planning for singles is so important.
What Can I Do to Take Back Control?
The only way for a single individual to truly control that outcome is to put a proper estate plan in place.
Issues can arise when a single individual passes away without an estate plan in place. Take the stress away from the unknown and plan your next steps for a will and estate plan. If you’d like to learn more details about taking these next steps, visit our FAQ Page by clicking here.
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“More than 50 Percent of Adults Do Not have a Will,”
according to Chas Rampenthal, general counsel of LegalZoom.
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Is an Estate Plan Important for Parents with Young Children? Yes.
You want what’s best for your children. And, should anything ever happen to your and or your spouse, you want to know that they will remain loved and protected with a guardian you trust. That’s why creating an Estate Plan that outlines thorough details in a Will should be at the top of your list. Why? Sometimes the unthinkable occurs. An Estate Plan is designed to help you provide the best possible care and protection for your children, should a guardian ever be needed.
Read on to explore why Estate Planning will be the best thing you do for your children.
1. Give Yourself Peace of Mind – Guardianship
An Estate Plan covers many areas, such as personal health care decisions, who will receive your assets, in addition to who will have guardianship over your children. If one parent dies, the surviving parent will usually have custody of the minor children as they are the natural guardian. However, if both parents pass away, a Court will assign guardianship.
In the Court’s assessment, they will look first to the ‘Last Will and Testament‘ of the deceased parent(s). This is a legal document detailing the parents’ choice for caretakers. It is important to understand, however, that although the parents have nominated the guardian in the Will, only a Court can actually appoint the guardian. The Court usually confirms the nomination of the parents, with the understanding that this was a thoughtful, purposeful decision on their end.
Are there any Exceptions?
There are some instances, however, when the Court, based on additional information and recommendations by family and professionals, will appoint someone other than the parents’ first choice. For this reason, it is important to nominate at least one alternate choice for a guardian in the Will.
2. Protect Your Child’s Future by Assigning a Guardian
If neither parent had a Will nominating a guardian, the Court will look next to family members. Many times there is a clear best choice and both sides of the family agree. However, without a Will, the situation can become quite problematic. What if multiple family members step forward, each believing he or she is the best choice?
Don’t leave your child’s guardianship to chance. It can result in a stressful, even bitter, prolonged and expensive proceeding that is difficult for everyone, particularly the children.
3. Consider Having a ‘For Now’ Guardian in Your Estate Plan
If you are having trouble choosing a guardian, it’s okay to nominate somebody that you might replace at some point in time. Pick someone “for now.” Children and relationships change, and your first choice of a guardian may change as well.
4. Make Sure You Have It in Writing
Most of us never think about dying. But sadly, not all parents live long enough to see their children grow up. As parents, you need to be prepared for the worst case scenarios and you need to have your preferences made known. Merely telling others who you want to care for your children isn’t enough. A guardian is only properly nominated when it is done in a Will.
Naming a guardian is perhaps the last and best gift that you could give to your children and family members. If you’re ready to secure your children’s future, Estate Planning can be simple (with the right guidance!). But, don’t wait too long. It doesn’t matter how little your children are. You want to make sure you’ve got a guardian in place so he or she can provide love and protection, should anything ever happen to you and your spouse. If you’d like to read more about how services and how to get started, click here.
Contact Mueller Law Offices today.
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What is a Trust and is it Important to Have One?
As an Estate Attorney, I’m often asked the question, “What is a Trust? Do you believe it’s important for me to have one?” The short answer: a trust is a three-party legal relationship that is an extremely valuable tool to use in your estate plan. And, if relevant to your financial situation, it’s very important to have one.
The long answer: When creating a trust, there are many factors to consider. There are also many benefits. With a trust, you are able to specify the distribution of your wealth to whomever you choose, conserve your legacy, and – in most cases – avoid probate. Continue reading to understand all the pertinent details and the benefits of having a trust. Also, keep in mind, should you decide to have one, legal counsel is advised and I’d be more than happy to help out.
Let’s Dig Deeper into the Question, “What is A Trust?”
A trust is a legal relationship or fiduciary agreement. One person, the “Grantor” (also known as a “Donor”, “Settlor”, or “Trustor”), transfers property to another person known as the “Trustee.” The Trustee holds the property, managing and using it for the benefit of a third person, known as the “Beneficiary”.
The property can be almost anything:
- Money
- Real Estate
- Business Interests
- Securities
Depending upon the type of trust, the Grantor, Trustee, and Beneficiary may be three different individuals. In some instances, they may all be the same person. The document which creates this relationship and spells out the terms is known as the “Trust Agreement.”
Once created, a Trust is a legal entity which is capable of owning property. It may even have its own taxpayer identification number and have to file income tax returns.
Types of Trusts
Trusts are usually defined by two characteristics. The first characteristic is the point in time at which the trust was created. The second characteristic which defines a trust is whether it is “revocable” or “irrevocable.”
Revocable Living Trusts
This type of fiduciary agreement has become increasingly popular. As the name implies, this is an “inter vivos” and “revocable” trust. This means the trust is created during the Grantor’s lifetime and keeps the authority to amend or revoke it. The Grantor, Trustee, and Beneficiary are all the same person. The usual purpose is to provide for the transfer of the Grantor’s assets to the beneficiaries upon the Grantor’s death. This will help to prevent going through the court-supervised probate process.
With a revocable trust, the Grantor keeps the authority not only to change the terms of the trust, but also the authority to revoke, or undo the trust completely.
Testamentary or Irrevocable Trust
A Testamentary trust is created during the Grantor’s lifetime through the Last Will and Testament of the parents. It is a common type of trust that allows the parents to provide for their children’s financial needs. For example, in the event of the parents’ death, a more mature, financially responsible person is named Trustee. They manage the money until the children are older.
This type of trust may not be changed or revoked. Even by the Grantor, once it has been properly created, property held in an irrevocable trust cannot be removed. Property that has been placed in a revocable trust can be removed by the Grantor at will.
Special Needs Trust
Similar to a Testamentary or Irrevocable Trust is a “Special Needs Trust”. This allows the parent, or another person, to provide financial support for a disabled beneficiary. It also helps to keep any governmental benefits (such as Medicaid or SSI) they may receive. Click HERE to learn more about this type of trust.
Funding the Trust
Putting property in a trust, a process also referred to as “funding the trust,” occurs when the Grantor transfers ownership of the property to the trust. Although the trust is the actual owner, the Trustee is the legal representative. Therefore, the Trustee’s name is usually used in the new title designation. For example, if John Smith created a trust for himself, but named his daughter, Jane, the Trustee of that trust, the new title designation may read “Jane Smith, Trustee of the John Smith Trust.”
Also, keep in mind that the Trustee has no personal ownership of the assets. He or she only holds and manages the property in accordance with the instructions described in the trust agreement, as well as other restrictions or authority permitted by law.
Caution should always be used when funding a trust because changing the title to the asset may not necessarily be the correct action to take. With some assets, it may be more appropriate to change the beneficiary designation. The purpose of the trust, as well as the type of asset (real estate vs. savings account vs. IRA), will dictate what should be done. Proper guidance from either a financial or legal professional should always be sought when funding a trust.
Looking to Get Started or Learn More?
Now that you’ve covered all of the detail, you should be able to offer some insight to others when they ask, “What is a Trust?” Just make sure to remind them that a Legal Attorney will help them through the planning process. What works for you might not work for your neighbor and visa versa.
If you’d like assistance in adding this tool to your estate plan, I’d be happy to offer guidance. You can reach me 414.430.1722, connect with me via email, or fill out a form on my contact page.
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What is a Trust?
Trusts: An Explanation of What They Are and How They Could Benefit You
A trust is a legal relationship in which one person, the Grantor, transfers property to another person known as the Trustee. The Trustee then holds the property, managing and using it for the benefit of a third person, known as the beneficiary. The property can be almost any type of property- money, real estate, business interests, securities, etc. The Grantor may also be referred to as the Donor, Settlor or Trustor. Depending upon the type of trust, the Grantor, Trustee and Beneficiary may be three different individuals, or in some instances, they may all be the same person. The document which creates this relationship and spells out the terms is known as the “trust agreement.” Once created, a trust is a legal entity which is capable of owning property. It may even have its own tax payer identification number and have to file income tax returns.
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