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FEDERAL EMPLOYEE'S
ESTATE PLANNING & PROBATE AVOIDANCE
Estate Planning
and Guidance for Federal Employees.
Federal employees with find that estate planning is not as daunting a task as many
lawyers make it out to be. Most people with estates worth less than the
federal estate tax threshold, currently $1,500,000, and who know what they
want to do with their property can prepare their own estate plans using this
site and the resources that we reference.
PROBATE AVOIDANCE
The book,
"Plan Your Estate" states that, "Probate is the name given the legal process by which a court oversees the
distribution of property left by a will." The average probate proceedings
take a year before the estate is actually distributed.
Most federal
workers accumulate assets throughout their lives and for the most part they
don't want those assets going through Probate. Probate delays asset
distribution to your heirs, wastes your beneficiaries inheritance and it is
a windfall for attorneys who can charge high fees to transfer property to
your beneficiaries under probate proceedings. There are simple ways for you
to avoid probate and this section will describe basic probate avoidance and
estate planning techniques that all can use.
ESTATE PLANNING OVERVIEW
TABLE OF CONTENTS
Your personal estate
is very simply “your property” – all that you own – at its current market value.
The planning that is required does not require you to be a mathematical wiz or
rocket scientist – anyone with average intelligence can plan their estate – even
without an attorney. The key is to have the proper references to help you
through the process. I highly recommend that you purchase a copy of “Plan
Your Estate” to guide your step-by-step through this process. It is the
ultimate estate planning guide and covers all states except Louisiana
which has a legal system based on Napoleonic Code. You can also visit your local
library to review this excellent resource. Many libraries have this title in
their reference section. When I was completing my estate plan I used this book
extensively, highlighting important information, underlining text, and writing
notes in the margins. I refer to it as situations change and keep it on my
reference shelf.
NOTE: Some situations
require legal help such as providing long-term care for disabled children. Also,
if your estate will be subject to estate taxes and/or you own a business you may
wish to consult with a professional. It is wise to review your plan with your
attorney in these situations and they can often add additional insight into your
particular needs and wishes. The key here is that you will have done much of the
leg work up front and your attorney fees should be considerable less if you go
through this process.
The planning that we propose
is useful for estates of any size, from modest to those who were fortunate
enough to accumulate estates worth millions. This is especially true for probate
avoidance techniques. The guidance offered here and in
“Plan Your Estate”
will help you avoid probate and understand estate planning basics.
There is no
one-size-fits-all prepackaged estate plan, everyone’s plan is unique and
personal. Going through this process will provide you with a much better
understating of your true net worth, your personal desires, and estate planning
vision. Estate planning pays big dividends up front that at first glance seem
transparent. By going through this process you will know who will inherit, what
they will receive, where all of your assets are now, your total net worth, and it will help you focus
on consolidating and simplifying your estate so that you can start to better
manager your assets TODAY. This was a real eye opener for me when I went through
this process.
This site along with the
recommended books and software will help you
address your concerns including:
Understanding wills and
revocable trusts
Probate avoidance techniques
Compiling asset lists and important insurance and medical data
Evaluating your retirement living expenses
Calculating your pre and post retirement total income
All
retiree’s and their spouses should have a will. A will is the basic tool that
you need to distribute your assets to those who you wish to inherit it. Property
left by a will is subject to probate and you can avoid probate with the use of
joint tenancy, Pay On Death (POD) asset registration, beneficiary designations,
and basic revocable living trusts. When you use these probate avoidance methods the
main purpose of the will is to designate a guardian for minor children, transfer
some property that is difficult to transfer otherwise such as vehicles, and to
transfer all residual estate property to your heirs. The will captures your
residual estate that includes unexpected gifts, lottery winnings, or asset
acquisitions that you did not have time to register using other probate
avoidance techniques. Plan Your Estate is an indispensable estate
planning guide that describes everything you need to know and what to do in
easy-to-follow steps. WillMaker Plus
2006 is an excellent
software program for you to use to write your own wills and trust documents. I
highly recommend all federal employees who are approaching retirement and those
who are already retired who haven’t completed an estate plan to use these
resources to guide them through this process.
A
living trust is a simple document that allows you to transfer property direct to
your heirs after your death without going through probate. Probate delays the
distribution of your assets for a year or longer and the attorney costs can be
as much as 5% or more of the estate’s value. Trusts are ideal for transferring
stocks, bonds, homes, collectables, antiques, and other assets that you can’t
easily transfer through POD, joint tenancy or beneficiary designations.
Typically you name the trust after the originator, called the trustee. For
example if you have stocks that you want to add to your trust you would transfer
registration from your name to “(Your Name), as trustee for the (Your Name)
Trust.”
As
trustee you have full control over all assets in the trust for as long as you
live. You can sell all trust assets and use them anyway you choose. Only after
you die does the trust become irrevocable and the successor trustee that you
designate in the trust document follows your wishes and distributes your assets
according to your wishes.
Trusts
have many benefits and several of the major ones are probate avoidance, the
ability to list any asset in the trust even those items such as collectables
that don’t have legal registrations like homes, stocks and bonds. You can simply
make a list of your coin collections, memorabilia, antiques, and art with good
descriptions and add this list to your trust documents. Then, your successor
trustee will be able to distribute the assets direct to your heirs soon after
you die without going through probate. Another advantage is that unlike a will
that is registered with the county and a public record, a trust document is
confidential and does not have to be registered with the county. Only your
successor trustee and heirs who are inheriting will know what is in the
document.
You can
easily write your own wills and trust with
WillMaker Plus 2007.
Also, "Plan Your Estate" is the ultimate estate planning guide and it
describes everything you need to know and do in easy-to-follow steps.
WillMaker Plus 2006 automates the process and all you have to do is
answer questions and from your answers the software program draws up your wills
and trusts with full instructions on how to proceed. The program will create
will and trust documents specifically for your state and in accordance with
current state law. You can modify your wills and trusts as the need arises with
this program and your are guided along the way so you are never left guessing
what to do next.
Living Wills & Healthcare Power of Attorney
A living will allows you to
determine - in advance - the level of care you desire if you should become
terminally ill. It also covers conditions such as Alzheimer's disease or if you
are diagnosed to be in a permanent coma, a medical condition that results in
death regardless of the continued application of life support. Every state has
their own unique forms.
I used
WillMaker Plus to draft both my wife's
and my Living Wills, called a Declaration in Pennsylvania. Two forms are printed
out, a Declaration which outlines your wishes, and a Durable Power of Attorney
that appoints a primary and alternate person to make healthcare decisions for
you if you can't. It takes less than a half hour to complete your forms and
print them out. In Pennsylvania you must have two persons over the age of 18
witness your signature and attest to your soundness of mind at the time the
document is signed. This excellent software covers all
states except for Louisiana. WillMaker Plus takes you through a step-by-step
interview to complete your personal forms.
Pennsylvania residents can download a Living Will and Healthcare
Power of Attorney booklet with sample forms from the Allegheny County Bar
Association at
http://www.acms.org/lw/livwill6.pdf. This highly informative booklet
explains the living will process through a question and answer format and
includes free fill in forms for the State of Pennsylvania. Even if you aren't
from Pennsylvania the booklet is highly informative.
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