Thursday, January 04, 2007

Trusts, Wills and Other Estate Matters

We didn't seriously consider getting all our estate planning papers in place until we were transferred on an international assignment. At the time, we were DINKS and weren't worried about how our estate was distributed.

However, as we prepared for the transfer, our Company's accounting firm recommended that we get legal affairs in order since other countries sometimes have different intestate laws (i.e. inheritance without a will) than the US. Without other guidance, their legal system will follow their laws. However, if the proper legal documentation is in place, they will honor the documents.

Here are the instruments we created:

Revocable Living Trusts. While our estate did not exceed the maximum tax free estate transfer amounts, we still chose this option. In addition to providing a tax free transfer of our estate, a revocable living trust provides additional benefits of having provisions should one be incapacitated and the proceedings on death remain private. The proceedings from probate of a will become public record.

Pour Over Will. Once a revocable living trust is created, the assets should be retitled into the trust. The pour over will cover assets that are not titled in the trust - e.g personal property and automobiles, which are typically titled to an individual.

Durable Power of Attorney. While the trust does have provisions should the grantor (i.e. beneficiary) be incapacitated, we also executed Durable Powers of Attorney. This gives my spouse the right to handle all my affairs should I be unable to do so.

Living Wills. This authorizes the medical caretakers to not take extraordinary means to keep one alive. My spouse signed one, but I did not. Personally, I still trust the judgment of my spouse over a document:-)

When we created these legal documents, we did not have any children. However, in anticipation of future children, the situation was written into the documents. So we did not need to revise our trusts when we adopted our daughter.

Disclaimer: I am not a financial advisor or attorney. Please consult your financial advisor and attorney before executing any of the above instruments.

For more My Wealth Builder financial approaches with previous or future generations, come back every Thursday for the segment on Crossing Generations.

Photo Credit:, Anita Patterson Peppers

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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