Written by P. Mark Accettura

INTRODUCTION

When we are married, our spouse is our logical and default caretaker. Forged in the wedding vows, and perhaps never ratified thereafter, it is agreed that each will watch over the other in sickness and in health. The law, in fact, recognizes the presumed authority of a competent spouse to speak for an incompetent one, and a surviving spouse to speak for the estate of a deceased spouse.

Now that you are single, you have no logical, or presumed caretaker. You must provide for your own sickness and death. You must decide who will make your medical and financial decisions in the event you become incapacitated, and who will manage your estate at death.

Other important questions must also be answered. If you have minor children, who will care for them, Sheppard them through their youth, teens, twenties, and perhaps beyond? Who will care for your handicapped children, children in bad marriages, children who are substance abusers? The answers to these questions are found in the process of estate planning, the subject of this chapter.

Estate planning is the process of assessing one’s lifetime and testamentary goals. Lifetime goals typically include providing for your own care in the event of incapacity. Testamentary goals include whom, when and how to distribute your assets at death, as well as planning to avoid probate and to minimize estate tax.

A typical Estate Plan, to the extent there is such a thing, begins with a Will, a durable power of attorney and a revocable trust. Each of these documents allows for the appointment of trusted individuals, or institutions, known as “fiduciaries,” to carry out your wishes at the time of your incapacity or death.

The scope and complexity of your estate plan is individual to you, and increases with the size of your estate and the degree to which your family deviates from the traditional nuclear family.

This Chapter discusses the following important estate planning topics:

1. Estate planning building blocks: Wills, durable powers of attorney and revocable trusts.
2. How to get started.
3. Why joint ownership and beneficiary designations should NOT be used as substitutes for estate planning.
4. The importance of “funding” your revocable trust.
5. Sizing up your estate and avoiding estate tax.
6. Gifting to avoid estate tax.
7. Planning for children of all ages with special needs.

LAST WILL AND TESTAMENT

A personal representative (also know as “executor” or “executrix”) is appointed to make funeral arrangements, disburse personal property, and if necessary, to represent your estate in probate court. Your Will is the proper document to appoint the Guardian of minor children. When used in conjunction with a revocable trust, the Will is known as a “pour over Will,” and serves to transfer un-funded assets (see “Funding Your Revocable Trust” below) into trust at death. A pour over Will acts as a safety net to catch any asset not transferred to trust during life and “pour” them over to your trust. Unfortunately, assets transferred into trust via the pour over Will must pass through probate.