- WHY IS AN ESTATE PLAN IMPORTANT?
If you pass away without a having an estate plan, then your gross estate (if worth over $150,000) will go through a time-consuming and costly legal process called probate. During this legal process, the probate court (not you) decides who will get your assets.
If you have minor children, the probate court will also appoint a guardian to care for your children and to handle their finances. Unfortunately, relatives often fight over guardianship and the Court may choose a relative that you would otherwise not have chosen as the person best suited to care for your children.
Probate is very expensive and time-consuming as it can last up to 2 years. If your estate goes through probate, then your loved ones will likely pay thousands of dollars in probate fees and will not have a right to your assets for several months if not years.
- WHAT EXACTLY IS PROBATE?
Probate is an expensive legal process that takes place upon your death if you do not have a trust and if you own more than $150,000 in gross assets. Probate is time-consuming as it can take up to two years to complete during which time your assets will be frozen. During probate, all your personal and real property will be identified, inventoried, appraised, and after all your debts and estate taxes are paid, the probate court will decide who will inherit your assets using the laws of intestacy and will then distribute your assets accordingly.
- WHAT ASSETS MAKE UP MY ESTATE?
Everyone has an estate – no matter how big or small. Your estate refers to all the assets you own at the time of your death, such as:
• Home/Real Estate
• Funds in Bank Accounts
• Securities (stocks, bonds)
• Personal Property (car, jewelry, artwork, collections)
• Life Insurance
- HOW EXPENSIVE IS PROBATE?
The table below illustrates the fees associated with probate. The amount of fees depends on the value of your gross estate.
These fees represent only attorneys fees and executor fees. It does not include court filing costs and other court fees often associated with probate. Therefore, the total fees owed will likely be higher than indicated in the chart above. Remember, having a trust can help you avoid these costs!
- IS AVOIDING PROBATE THE ONLY BENEFIT OF AN ESTATE PLAN?
Many people believe that the only benefit of having an estate plan is to avoid probate. The truth is that an estate plan offers multiple benefits, which include:
1. Privacy: Having an estate plan allows you to keep your information private because it won’t go through the court system, which is a public forum. Therefore, you can transfer your assets to your loved ones without publically disclosing the worth of your estate or the assets you owned at the time of your death.
2. Control: An estate plan offers you the control to decide who should inherit your assets, when they will inherit your assets, and under what conditions they will inherit your assets when you pass away. When people fail to plan for the future, the probate court will make all these decisions according to intestacy laws and the probate code, which oftentimes greatly differs from your personal wishes.
3. Avoiding Family Conflict: Too often we see close relatives grow distant after the death of a loved one. Having an estate plan often ensures that your children or other relatives will not argue over money. An estate plan, therefore, can help promote family harmony because you will identify the distribution of your assets so that arguments can be avoided.
4. Tax Savings: An estate plan may also help you save on income and estate taxes that you otherwise might have to pay if you had not planned for the future.
- ISN’T AN ESTATE PLAN ONLY FOR WEALTHY PEOPLE?
No. A big misconception is that only wealthy people need an estate plan but estate plans serve multiple purposes, including, planning for times of incapacity. Also, everyone needs to designate how they want their assets distributed upon their death, especially if you are a parent and want to ensure that your children and assets are protected.
- AM I TOO YOUNG TO GET AN ESTATE PLAN?
We draft estate plans for people of all ages because no one knows when they will pass away or if and when they might become incapacitated and need someone to act on their behalf. Therefore, we recommend that every individual, over the age of 18, thinks about estate planning in order to protect themselves and their families during difficult times.
Parents who have minor children are especially concerned about making sure that they have named a guardian for their children in the event something happens to both parents. Therefore, you are never too young to start planning for your future and ensuring that you and loved ones will be protected.
- HOW WILL AN ESTATE PLAN PROTECT MINOR CHILDREN?
If you do not have an estate plan, the court will decide who gets physical custody of your minor children. If you have an estate plan, however, you choose who will be the guardian of your minor children and when they should receive their inheritance.
If you are a parent (especially a single parent) and have minor children, it is imperative that you plan for your children’s future by creating an estate plan that names a guardian you feel is best suited to care for their needs.
- WHAT IS A LIVING OR REVOCABLE TRUST?
A living trust, also known as a revocable trust or inter vivos trust, is an estate planning tool that allows you to outline how you want your assets to be managed and distributed to your chosen beneficiaries. A living trust is a legal arrangement that gives you full control over your assets during your lifetime.
When you pass away, the trustee (the person who you chose to manage your trust), will ensure that your assets are distributed to the right people thereby avoiding the time-consuming and costly probate legal process.
A major benefit of creating a living or revocable trust is that you are able to alter, modify, revise, and even entirely revoke the terms of the trust during your lifetime as circumstances and your wishes change.
- IF I HAVE A LIVING TRUST, DO I STILL NEED A WILL?
Even if you have a living trust, you will still need a will to catch any assets that you inadvertently left out of your trust. This type of will is known as a “Pour-Over Will” and is an important estate planning tool.
- WHAT DOES IT MEAN TO “FUND” A TRUST?
Once you have a valid trust, it is critical that you transfer ownership or title of your assets into the trust. This process of transferring assets into your trust is known as funding. Assets that are not transferred into your trust may be subject to probate. With our help, however, you can be sure that your assets will be properly funded into your trust and that your estate plan will be complete and valid.
- HOW LONG DOES IT TAKE TO COMPLETE AN ESTATE PLAN?
Not long! Knowing how important having an estate plan is, our goal is to get your documents to you as quickly as possible. Therefore, we immediately begin the information gathering process. Once we’ve had a chance to discuss your wishes and gather the information we need, we make it our priority to get your documents drafted and sent for your review within 2 to 3 weeks.
- WHAT IS THE FEE STRUCTURE FOR MBM ATTORNEYS?
To begin with, MBM Attorneys offers a free consultation for every client who is interested in learning more about how an estate plan can serve their needs. During this free consultation, we will discuss your personal needs and wishes and will be in a better position to quote you a fee.
Although some attorneys charge hourly fees for estate planning documents, MBM Attorneys always charges a flat fee for every estate plan. Therefore, our clients are always aware of the cost upfront and do not have to worry about additional fees and costs.
During our consultation, we will review with you all the documents that are included in our packages so that you can see firsthand the thoroughness that come with each of our customized and individualized estate plans.