If you don’t have an estate plan, the laws of the state will dictate the distribution of your assets upon your death. Allowing the default laws to dictate the distribution of your estate can result in unintended distributions of your assets, family disagreements, and increased probate costs. No matter the size of your estate, you should have a plan to effectuate your intended distribution of assets. Estate planning encompasses much more than just having a will or a trust. It entails a global review of your current probate and non-probate assets, gifts, and transfers. It can also involve implementation of probate avoidance measures. The Estate lawyers at Joseph Hollander & Craft in Wichita, Kansas City, Lawrence & Topeka Kansas will listen to you and assist in creating a plan that accomplishes your desires.
PRE-NUPTIAL AND POST-NUPTIAL AGREEMENTS
Pre-nuptial and post-nuptial agreements can impact the distribution of one’s estate. State law guarantees a spouse certain rights and interests in the deceased spouse’s estate. However, those rights and interests may be waived. In some cases, couples wish to use these pre- and/or post-nuptial agreements as part of their global estate planning.
Some assets may allow for a direct transfer to an identified beneficiary upon the individual’s death. The most common examples of such assets include retirement accounts and life insurance policies. Sometimes titled assets are held in joint tenancy with rights of survivorship. Upon the death of one joint owner, the decedent’s interest automatically passes to the remaining joint owner(s). Deposit accounts held at financial institutions may be held in joint tenancy or have beneficiary designations such as “transfer on death” or “pay on death” to allow immediate transfer without the necessity of probate. Beneficiary designations are great probate avoidance mechanisms, but, without careful planning, the assets may be subject to satisfying a surviving spouse’s minimum statutory share of the decedent’s estate.
Distribution of Assets
Wills identify your intended distribution of assets upon your death. Wills need to be executed in a specific, formal manner and in the presence of witnesses in order to be admitted and given effect by the probate court. Having a will can eliminate family disagreements over the distribution of your assets because the will makes your intent clear.
Having a will is extremely important if you have minor children. One reason is that you may suggest a guardian to care for your minor children should they have no surviving natural parent after your death. The suggestion of a guardian may be of assistance to the court and the loved ones who have survived you.
You can also establish a testamentary trust in a will with the appointment of a trustee to manage the trust assets for the benefit of your minor children. Often times this is the most effective way to transfer assets for the benefit of minor children. A testamentary trust doesn’t come into effect until you have passed. You can identify the testamentary trust as the beneficiary of life insurance policies, retirement accounts, deposit accounts, or titled assets so that they can be directly transferred to the trust outside of the probate process.
Living wills are important to communicate to your family and health care providers your desire regarding certain healthcare interventions when faced with terminal or incurable conditions.
A grantor may create a living trust. The trust may be revocable or irrevocable. A living trust is effectuated upon its creation (as opposed to a testamentary trust that comes into effect only upon the grantor’s death). The trust must be immediately funded. One or more trustees will be charged with the responsibility of managing the trust assets for the benefit of the identified beneficiaries. There are tax and other financial considerations that should be considered before establishing a living trust.
POWERS OF ATTORNEY
Powers of attorney are a cost effective method of contingency planning. A power of attorney allows you to appoint someone to act in your stead should you be unavailable or incapacitated and unable to act for yourself. Powers of attorney can be for specific purposes or a general all-encompassing grants of power. In some cases, having the powers of attorney in place ahead of time can avoid the necessity of guardianship and conservatorship actions which necessitate court appointment and oversight.
The formality of probate proceedings tends to vary from county to county in Kansas. In all cases in which the decedent has a will, the will needs to be filed with the appropriate district county court within 6 months of the decedent’s passing. A will often names an executor to handle the estate’s affairs. The court will need to formally appoint and grant such power to the named executor. The executor will then have the responsibility of acting in a neutral and unbiased manner to manage all of the estate’s affairs for the benefit of the decedent’s creditors, heirs, and beneficiaries. Managing the estate’s affairs may include filing taxes, liquidating assets, responding to creditor demands, and ultimately distributing the estate assets in accordance with the court’s direction.
If the decedent did not have a will, then the decedent died intestate. Even though the decedent did not have a will, intestate administration through probate proceedings may be necessary to resolve the estate. One of the decedent’s creditors or heirs may petition the court for probate proceedings. The court will appoint an administrator to handle the state affairs. The administrator’s duties mirror that of an executor.