In this episode of The Practical Planner, hosts Anne Rhodes & Thomas Kopelman dive deeper into the world of trusts, giving nuanced definitions of what differentiates a revocable trust from an irrevocable trust and providing advisors with the knowledge they need to discuss the functionality and benefits with their clients.
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The common name for a trust that benefits the trust creator’s spouse. A sub-trust is a type of trust that is “created under” another Trust (or a “trust within a trust”).
A Marital Trust is useful for someone who has children from a previous relationship, worries about someone influencing their spouse to disinherit their beneficiaries, or is wealthy enough to worry about the estate and generation-skipping transfer taxes.
They receive a deceased spouse’s assets for the benefit of the surviving spouse. They generally protect assets from creditors while preserving the deceased spouse’s wishes for how their assets will be distributed and used, including at the surviving spouse’s death. When properly structured for tax planning purposes, they can preserve the deceased spouse’s generation-skipping transfer tax exemption amount without jeopardizing the unlimited marital deduction.
There are many ways to design a Marital Trust. If you want your spouse’s inheritance to qualify for a benefit called the “unlimited marital deduction” (i.e., passing an unlimited amount of property at your death to your spouse completely free of estate tax and without using your estate tax exemption), the Tax Code has stringent requirements for the design of this Trust. The Trust must qualify as a “qualified terminable interest property” (or QTIP) Trust. The wealth.com Marital Trust is this type of Trust.
Download A Printable Version of this Marital Trust Guide
Download PDF*Disclaimer: wealth.com is not a law firm and is not practicing law. That said, our platform is maintained with care by attorneys who used to practice at the top trust & estate law firms in the U.S. so you can be sure each legal document created with Wealth.com is of the highest quality and is legally valid and optimized for its state, covering all 50 of the United States and Washington D.C.
A good estate plan allows you to understand what happens to your assets when you pass away.
Generally speaking, there are three factors that can impact what happens to your assets at death:
It is not commonly understood that there are certain assets, such as a 401k, with beneficiary distribution rules that can override what is outlined in a Will or Trust.
This means that understanding the totality of various beneficiary designations is crucial to your estate plan functioning as you intend.
If that seems daunting, you’re not wrong. Trying to consolidate and manage everything that requires beneficiary designation manually can be tricky, especially as your life circumstances change over time. Fortunately, the wealth.com platform makes all of this easier to manage.
More on that in a bit — first we further explain how beneficiary designations function within optimized estate planning.
Many types of assets allow for a formal “beneficiary designation,” which directs where that asset will go upon your death regardless of the terms of a Will or Trust. Common examples of such assets include retirement accounts and life insurance policies. .
A closely related cousin of the beneficiary designation is a “pay on death” (POD) or “transfer on death” (TOD) designation. The same idea applies: if you pass away, your designation will bypass your Will or your Trust. Some states allow vehicles, personal objects, and real estate to pass through TOD, but the documentation must be carefully prepared to meet the legal requirements. Bank and brokerage accounts, closely-held stock and other securities may also pass by POD or TOD depending on the bank or custodian that maintains the account for you.
Typically, beneficiary designations are made through the institution where the asset is held (a custodian or administrator). Once a beneficiary designation has been made through the institution, it is important to keep track of who you designated as beneficiary for each asset so it aligns with and does not contradict how you want asset distribution to go in your estate planning documents.
Not all assets are eligible to have a designated, POD or TOD beneficiary. For example, there is currently no cryptocurrency exchange or investment platform that will allow you to designate a beneficiary for your crypto assets. It turns out a Will or Trust is one of the best ways to make sure your crypto will go where you want them to at your death.
Your assets can be owned in different ways. You can own them jointly with others and the titling carries implications for the designation upon death, or through an entity like a trust or corporation.
Certain ownership types, like “With Right of Survivorship,” “Joint Tenancy” or “Tenancy by the Entirety,” legally indicate that at one of the joint owner’s death, the other surviving joint owner(s) will automatically inherit the asset. In that case, the last survivor takes the entire asset and will be able to pass the asset to their beneficiaries through their Will or Trust. These forms of titling are especially common when you purchase real property with someone else.
The automatic transfer on death processes supersede any beneficiary designation or terms in your Will or Trust.
If you own an asset through an entity or arrangement governed by an agreement, the agreement may specify what your rights and restrictions are upon death. For example, you may own real property through an LLC.
The operating agreement for the LLC may contain provisions restricting your ability to transfer your LLC interests to your own beneficiaries upon your death, or give a right of first refusal to the other LLC members to purchase your interests.
If post-death rights are not spelled out, those LLC interests would likely default into your estate and pass to your beneficiaries through your Will or Trust.
Finally, many assets do not transfer to someone else automatically upon your death, as outlined in the two categories above.
These assets typically pass pursuant to your Will or Trust.
These three methods of asset distribution can work together as part of your overall estate plan to dictate where your assets will go upon your death.
However, understanding which assets have beneficiary designations and whether how you have titled the asset affects the default rights upon your death can be difficult because they are often disaggregated.
This is where the wealth.com platform comes in: our Asset Aggregation and Ownership Balance Sheet tools help record how you own your assets and what their various beneficiary designations are all in one place.
This information at the asset by asset level can be seamlessly paired with your estate planning documents to give you an understanding of how your assets will be distributed and with whom they will end up after your death.
Wealth.com helps you create and maintain a cohesive estate plan — providing the peace of mind that comes from knowing the friction your heirs will experience is minimized and your estate will be administered correctly when the time comes.
Note: Recording or updating beneficiary designations in the wealth.com platform does not alter your beneficiary designations; instead, we make recording all of your externally designated beneficiaries simple which helps maintain updated records and aids in the estate administration process.
The Checklist available for download below is designed to help people understand their responsibilities and organize tasks following the death of an individual who asked them to administer an estate.
Advisors can use this as a general guide to help clients navigate the administration of an estate through to its conclusion.
Estate Administration Checklist Download PDF
What is the difference between a trust and a will? This is one of the top questions in estate planning, but finding a clear answer isn’t always easy.
In this episode of The Practical Planner, Anne & Thomas dispel common misconceptions through straightforward discussion of the differences between wills and trusts, both definitionally and in practice — providing advisors with an actionable basis for estate planning conversations with their clients.
Watch or stream wherever you get your podcasts.
Adding value to a client doesn’t have to be complicated; sometimes, it’s as simple as making sure your client’s loved ones are taken care of if something were to happen to your client.
The checklists available to download below can be used to help clients optimize their planning — wherever they are in their estate planning journey.
But first, what is estate planning?
Estate planning encompasses two types of planning:
Every single one of your clients needs a foundational estate plan – and knows it. You can deliver massive value just by helping them check that box off. Then, you can graduate your client into the more complex transfers if they need it.
Review the legal documents alongside all beneficiary designations (e.g., IRAs, 401 (k)s and life insurance) and right of survivorship designations (e.g., WROS on financial accounts and real estate). These designations override the Will or Trust, which may come as a surprise to your client. Designations are often used as stop gap solutions until someone has a proper Will or Trust, at which point the designations may be removed in favor of the estate or be “funded” (i.e., transferred) into the Trust.
*An attorney or digital estate planning platform like wealth.com can help your client determine if a Trust is more appropriate than a standalone Will. The key consideration is whether avoiding a full-blown probate process, including privacy, is important to your client.
How often do you find wrong or missing beneficiaries when you go over the Will or Trust of a client (or potential client)?
Our partner Retirement Tax Services found that over 60% of prospective clients have wrong or missing beneficiaries, when they have an estate plan at all. That means the prospective client would be leaving assets to someone they didn’t expect at all. This is when the client has that “aha” or “I can’t believe this” moment.
Using the checklists included in the PDF below can help advisors create these “aha” moments and improve their clients overall financial wellbeing with better estate planning.
Estate Planning Checklist
Download PDFIn the premiere episode of The Practical Planner, hosts Anne & Thomas break down the foundational estate planning knowledge advisors need in an actionable way with real-life examples.
Watch or stream audio wherever you get your podcasts.
TL/DR: Estate planning isn’t as complex as it may seem and you don’t need a legal degree to create one. In short, estate planning is simply recording your wishes for what happens if you’re unable to manage your own affairs. This quick and comprehensive overview will give you a working understanding of the estate planning basics.
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No one likes to think about death, especially their own. But think about this: What will happen to your stuff—money, family heirlooms, even a pet—if something happens to you? If you haven’t created a document that tells your loved ones who should get what, and who should sign off on those decisions and do all the paperwork, your loved ones will have to decide for (and potentially argue among) themselves. You can provide for your family’s needs, ensure your wishes are honored, and save your loved ones a lot of anguish during an already stressful time by creating an estate plan.
Although estate planning is essential for ensuring your money and property are distributed in exactly the way you want, only one-third of adults in the U.S. have a Will. That overall number has fallen steadily over the past five years, but the COVID-19 pandemic did inspire those ages 18 to 34 to write a Will—63% more people in that age group created a Will in 2021 than in 2020.
So why don’t more people do it? The five main reasons are:
Unfortunately, these misconceptions are preventing people from putting even a basic plan in place. People perceive estate planning to be complicated, scary, or simply not relevant to them. The reality is, you don’t have to be a millionaire or own multiple homes to benefit from an estate plan.
You need an estate plan if:
Do any of these sound like you? Because most everyone can benefit from the peace of mind an estate plan brings, we want to demystify the process so everyone—yes, even those without a law degree—can see that it’s simpler and more accessible than they think. And, hopefully, the information in this guide will equip you with enough information to quit putting off this important task.
At its most basic level, estate planning is making preparations for when you’re no longer able to make decisions for yourself. It requires creating and signing a few legal documents; but more importantly, it requires thoughtful decisions so that the money and possessions you have earned and accumulated can be passed down to your family or whomever you choose.
Let’s talk about what you’ll put in place as part of a basic estate plan. The legal documents are:
There are two types of Trusts.
No one needs an estate plan. That is, unless you want to avoid confusion, chaos, hurt feelings, family drama, and delayed distribution due to probate. So, maybe you do need one?
An estate plan lets you give the gift of clarity to your loved ones—and does all the legal heavy lifting so they don’t have to. When you spell out your wishes in the legal documents listed above, there’s less second-guessing about your intentions for how your stuff should be distributed.
The opposite is true if you die without a Will or Trust in place. Legally, you are dying intestate, and your home state’s succession laws will determine how your assets will be distributed and to whom. These succession laws differ from state to state, but were likely drafted a long time ago, based on the most common wishes of a typical, American nuclear family, and likely do not reflect the complexities of your family and cultural heritage.
By not creating an estate plan, you are just letting the state legislature from decades ago take a guess as to what your wishes are. This is especially true if you’re single and don’t have dependents.
You may own assets that will not pass through your estate, either because of the title on the asset or because you designated a beneficiary. For example, jointly owned property–real estate, a car, or bank account–will automatically pass to the survivor, or you may have designated a beneficiary for a life insurance policy or retirement account. However, it is still important to have a Will or a Trust for several reasons. Certain assets must pass through your estate (for example, personal objects or cryptocurrency), so the only way to direct where they go at your death is through a legal document. Having no assets in your estate will make it difficult to pay for your last expenses, including funeral costs, legal fees, and any taxes.
Now that we’ve looked at the important reasons why to have an estate plan, it’s time to turn to the who in an estate plan.
The most important person is you, the creator of the Will (testator) or Trust (called grantor, settlor, or trustor–not to be confused with the trustee!). By taking the time for careful consideration and creating various legal documents, you are establishing clear expectations for how you want your money and property to be handled upon your death.
The other essential players involved in estate planning include:
Beneficiaries: These are family members, loved ones, or charitable organizations—anyone who receives an asset of yours in your Will or Trust. Assets can include cash, real estate, or that piano you inherited from your grandparents.
Heirs: If you die without an estate plan (or all the beneficiaries you listed in your estate plan have passed away or otherwise do not qualify to receive your assets), the people who will receive your assets are known as your heirs. Your heirs are determined under default succession laws. They are not necessarily the people you would have named as your beneficiaries.
Executor: If you create a Will, you will name an executor (sometimes called an administrator or personal representative) to manage your affairs after you die. This person will collect your property, pay any debts and taxes, and distribute the remaining property according to the terms of your Will. This often takes a bit of legwork, including contacting banks, investment and insurance companies, and appraisers.
Trustee: When the centerpiece of your estate plan is a Trust rather than a Will, this person manages your affairs just like an executor would. Because the roles are so similar, generally the same person is named in the role of successor trustee and executor. Moreover, if you put assets into your Trust during life, the trustee can manage them during your incapacity, instead of relying on a financial power of attorney.
Agent or attorney-in-fact: Not to be confused with an actual lawyer, this is the person you named in your financial or health care power of attorney to act or make decisions on your behalf.
Guardian: If you have children who are minors or have special needs, this is the person you name to care for the wellbeing in case both you and the other parent are unable to care for those children.
If you’re wondering whether a lawyer is also part of this list, it depends. Most people can set up and manage their estate plan on their own using online tools, like Wealth, which are backed by extensive legal expertise.
When you put together the what, why, and who behind estate planning, you can see it really boils down to thinking about and documenting your final wishes, then appointing someone you trust to be in charge of executing those wishes after you die. It’s a simple, thoughtful act that protects your family and your legacy.
We hope these explanations have shown that estate planning is important but not impossible. Like death itself, it’s not something people talk about much, which has led to a myth that it’s too complicated for the average person to tackle. The reality is, estate planning takes time and consideration, but it’s time well spent to safeguard your loved ones’ wellbeing.
So much of estate planning is thinking through how you want things handled after you die, before you start actually making a documented plan. The idea of a financial power of attorney (FPoA) flips that a bit, because it’s about appointing someone to handle your affairs in case you become incapacitated and can’t make your own decisions. The process seems complex, but we’ll simplify it so you can make sense of the basics you need to know to include this important element in your estate plan.
In a nutshell, a financial power of attorney is a document in which you appoint a trusted person to act on your behalf to make financial decisions. In establishing a FPoA, you hand over the legal reins to another person to conduct financial transactions, sign documents, or make other legal decisions as if they were you. This might happen for only a limited period of time (during a serious illness or after an accident, for example), or it can take effect immediately upon signing and last up to your end of life. Once your FPoA is completed, your trusted person, the agent, sometimes called an attorney-in-fact or fiduciary, can be responsible for managing your financial affairs. You will need to use a second document, called an Advance Health Care Directive (sometimes known as health care proxy or health care power of attorney), to designate who should handle all of your medical decisions. There are several types of FPoA, so consider the specific needs of your estate before selecting one.
The type of FPoA most commonly used in estate planning is a durable power of attorney. “Durable” indicates that your agent has your permission to act on your behalf even though you are incapacitated or disabled. In other words, the FPoA is effective until you either revoke the document or have passed away.
You can spell out your agent’s powers, responsibilities and restrictions in the FPoA. The powers vary from state to state but usually include the ability to:
Hire professional assistance, such as a lawyer or advisor
When an FPoA is not “durable,” your agent’s powers end when you become incapacitated or disabled. In other words, you want to supervise your agent’s use of the FPoA powers. This can be a good option for transactions that are not driven by estate planning needs. For example, you might grant your advisor a non-durable FPoA to conduct time-sensitive trades on your behalf.
In addition, you may be comfortable allowing your agent to change your estate plan or the rights of your beneficiaries; because these are such sensitive powers, in most states, you must affirmatively grant each estate planning power.
A complete estate plan should provide not only for death, but incapacity and unavailability. Putting a FPoA in place allows someone to continue managing your financial affairs if you cannot sign important documents yourself in case of emergency, a routine surgery, or even travel abroad.
Keep in mind that to complete your FPoA, it must be signed in accordance with your specific state’s requirements, which might mean signing before a notary public or witness(es).
The wealth.com platform makes it straightforward to get your Financial Power of Attorney drafted and securely stored in our Vault, and provides state-specific guidance on how to fill out and sign your FPoA.
Get this guide to Financial Power of Attorney as a printable PDF
Download PDFTL/DR: Digital online estate planning can be safe, easy, and practical. Common questions about the process are discussed below.
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Online options for things we once did in person are on the rise, and estate planning is no exception. Inexpensive and easy-to-use digital planning tools now allow you to create your Will, Advance Health Care Directive, and other estate planning documents at a fraction of the cost of hiring an attorney. But how do you know if digital estate planning is the right choice for you?
Below we answer common questions regarding ease of use, privacy, and security considerations when selecting a digital estate planning platform.
A: An online estate planning service should maintain rigorous security standards to protect user privacy. Wealth uses multi-factor authentication and bank-level encryption to secure all data from any potential breach.
A: Most online estate planning platforms work well for uncomplicated family and financial situations. The Wealth platform provides for unique situations, including blended families, gifts of specific items, creation of estate tax-exempt Trusts (e.g., the credit shelter or bypass Trust), and family-owned businesses. If you have any questions regarding your estate, you should consult a qualified attorney. Even if you’ve already created a Will or Trust with an attorney, you can still use online estate planning to modify those documents and manage your estate plan and keep track of your Trust assets.
A: Online digital estate planning can be much less expensive than meeting with an estate attorney in person. Additionally, you can revise your estate documents if you change your mind about gifts, agents, or if your life circumstances change. Digital estate documents do not include legal advice specific to your situation. If you have any questions about your estate documents, you should speak to a qualified attorney.
A: You can start your digital estate plan by simply providing your contact information and creating an online account. Once your account has been set up, Wealth will guide you step by step through the process of adding family members, beneficiaries, assets, gifts you would like to give, etc. Wealth provides guidance on how to select trusted agents, validate documents, and alerts you when issues might arise when transferring property or giving gifts.
A: Each state has its own laws about signing, witnessing, and notarizing estate planning documents. Wealth provides signature pages that are valid in your state of residence. Additionally, your Wealth documents will include detailed signing instructions and will alert you if a notary and/or witness(es) is required at the time of signing.
A: Wealth estate planning documents have been customized for the laws of your state and have been reviewed by a licensed attorney in your state. Wealth uses multi-factor authentication and bank-level encryption to secure your data from any potential breach. You can revise your documents at any time on your Wealth Portal online account. For an additional fee, an attorney licensed in your state is available to answer questions specific to your estate needs.
Ready to begin creating your estate plan? Click here to get started.
Start My PlanTL/DR: In simple terms, a Will is a legal instruction to the court about what should happen to what you own after you have passed away. A Trust is a contract you make with someone whom you trust about what you own, regardless of whether you have passed away. There are many types of Trusts, but the Revocable Trust (or Living Trust) is most commonly used as a substitute for a Will. The Revocable Trust may offer you some advantages that a Will doesn’t, as this article will explain.
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In climactic movie scenes and music videos when a family gathers to hear how the dead person’s fortune will be split up, it’s always the deceased’s Will being read out loud for the big reveal. In real life, however, a Will doesn’t get read out loud; instead, the executor sends a copy to all known beneficiaries.
Even without a dramatic reading, you might still have concerns about keeping your last wishes private. A Will becomes a publicly available document on the probate court’s docket. Probate is often how the press learns the details of a celebrity’s assets and who the heirs are after the celebrity has died.
If maintaining your privacy is important to you, consider making a Trust – and not a Will – the centerpiece of your estate plan.
A Revocable Trust (or Living Trust)* can be a great alternative for many reasons, beyond privacy. These fall into four main categories:
Note that just because most Americans have a Will* and not a Trust does not mean that you should have a Will. Depending on your situation and wishes, a Revocable Trust may be the best option for you.
If, after we dig deeper into each of the differences, you’re still not sure, take our quiz here.
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*1 The rest of this article may refer to this type of Trust as simply “Trust.” A Revocable Trust (or Living Trust) is not to be confused with an Irrevocable Trust. Learn more about this topic here.
*2 A lot more people have a will (60% of the people we surveyed in our estate-planning research who have an estate plan) vs. a trust (38% have a living or revocable trust, and just 19% have an irrevocable trust).
The main reason people choose a Trust is to simplify the court process that happens at death, which is called “probate.” If you die with a Will that distributes your assets (or without an estate plan at all), a probate judge will oversee how your assets will be distributed.
This process can be difficult and expensive and take a long time. If one or more factors indicate that probate will be more onerous for your estate, you should consider putting in place a Trust to avoid probate. These factors are:
(a) You live in a state that tends to have a complicated or expensive probate process.
(b) You own real estate (or tangible objects of significant value) that is located in a state other than your home state.
(c) You own assets that are complex and may require more active court supervision, like stock that is not publicly traded.
Unpacking each of these factors:
(A) Some states charge probate or court fees based on the size of your estate (i.e., how much you owned in your name at death). Attorneys may charge up to tens of thousands of dollars to help your executor navigate probate. All those fees are first paid from your assets, so there will be less left to distribute among your loved ones. And even when your assets are not particularly complex, probate in your home state could tie up your assets for up to two years. If you live in a state like this, a revocable trust will allow you to put more control in the hands of your trustee and “bypass” much of the probate process.
(B) If you own real estate or personal property in another state, dying with only a Will means that your executor must start probate processes not only in your home state, but in all the other states as well. By putting the property located in other states in your revocable trust,* your trustee will be able to avoid these “offshoot” probate proceedings.
(C) If you own assets that are a little more complex, such as stock that is not publicly traded, your executor will have to coordinate more closely with the probate court to make sure the stock is properly transferred to the appropriate beneficiaries. This can lengthen the time for probate.
If you anticipate that probate would be costly and time-consuming for your loved ones, a Revocable Trust might be the best option for you.
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*If you place the real estate or personal property in an entity like a limited liability company (LLC), you may also be able to avoid probate, but that analysis must be done by an attorney licensed to practice law in the state where your real estate or personal property is located.
As part of the probate process, a Will becomes part of the public record. Revocable Trusts typically avoid probate (unless there is an issue like an angry family member who brings a legal claim against your Trust). With a Revocable Trust, your estate plan is more likely to remain private.
Information that will become public if part of your Will include:
(a) Who you consider to be your family members.
(b) Who you want to exclude from receiving your assets or having a trusted role in your estate plan.
(c) Who will receive your assets, and how much of your assets they will receive.
(d) How you would like your last remains to be handled.
If you would prefer to keep these details private, a Revocable Trust might be the best option for you.
A Will does not become effective until you die, whereas a Trust is effective immediately on the day you create it. As a result, a trust has legal effect before your death – i.e., while you are alive but either incapacitated or unavailable. If it is important for you that someone take over responsibility for your financial affairs immediately if something were to happen to you, then a Revocable Trust gives you a more powerful vehicle compared to a Will or a financial power of attorney.
Ensuring that “it’s business as usual,” can be especially important if you own a closely-held business and you are expected to be involved in the day-to-day operations or in making high-level decisions by voting your shares. Your succession planning for your business should include transferring your shares into a Trust so that your trustee can step into your shoes if something happens to you.
A Trust can be used as an alternative to a Will, but the vocabulary will be different and less familiar to most people, which contributes to the feeling that Trusts are more complicated than Wills. For example, instead of referring to an “executor” or “personal representative,” the trusted individual who will manage your affairs is called a “trustee.”
That being said, if there are factors indicating that you should have a Revocable Trust, you should not let legal terms discourage you from using a Trust as the centerpiece of your estate plan.
1. If you have a Revocable Trust, you won’t need a Will.
Even if you have a Revocable Trust, you will still need a Will. If you pass away with any assets in your own name, you need a Will to make sure all of those assets go into your Trust, where the Trust will instruct where those assets will go. This type of Will, which accompanies a Revocable Trust, is much shorter than a standalone Will and is commonly known as a “pour-over Will.” This is important because some assets must be owned in your own name while you’re alive, like a retirement account, and you may not get around to putting all your assets in the name of your Trust before you pass away.
You will also need a pour-over Will to name an executor and guardian(s) for your children, if any.
2. As long as I have a Revocable Trust, my loved ones will definitely avoid probate.
A Will must go through probate, whereas a Revocable Trust has the opportunity to avoid probate.
First, you will need to “fund” your Trust, which means transferring as much of your assets as possible into your Revocable Trust. Some courts, like in California, may allow you to avoid a full-blown probate if you show that you intended to fund your trust by signing a general assignment of all your assets into the trust. Other states will instead require that you actually re-title any real estate and change the owner on your bank accounts and other assets.
Lastly, the probate court may become involved to resolve any issues among your beneficiaries or trustees. For example, someone may call into question whether your Will and Trust are not valid.
3. A Revocable Trust will make it harder for someone to sue my estate.
We all fear that someone will be unhappy with the wishes of the decedent or how the estate administration is being handled and bring a lawsuit against the estate. Having a Revocable Trust instead of a Will will not deter a motivated person from suing against your assets at your death.*
Note that a Revocable Trust should not be confused with an Irrevocable Trust, which may offer some level of asset protection. Asset protection means that a creditor (for example, someone to whom the Trust beneficiary owes money for an accident) may not be able to reach the Trust assets because the assets are considered to be separate from the beneficiary and cannot be used to fulfill the beneficiary’s debt.
4. If I anticipate that my estate will owe death taxes, I must have a Revocable Trust.
Tax planning for estate and generation-skipping transfer taxes can be accomplished with either a Will or a Revocable Trust as the centerpiece of your estate plan. You do not need a Revocable Trust just because you may have a death tax issue. The important thing is to make sure your Will or Trust has the proper provisions to meet your tax planning goals. Your Will or Trust must create Trusts after you’ve passed away (a testamentary sub-Trust) that comply with the Tax Code and direct your assets into those sub-Trusts using rules or formulas that will minimize taxes in the long term.
Sub-Trusts are Irrevocable Trusts created at your death and are not to be confused with Revocable Trusts that you create while you are alive as an alternative to writing a Will.
5. If I would like more control over how my assets are used after my death or keeping my assets within my family across generations, I must have a Revocable Trust.
If you would like to maintain some control over how your assets are used or gifted away after your death, you should make sure sub-Trusts (see 4 above) are created after your death. To create this type of sub-Trust, you can use either a Will or a Revocable Trust as the centerpiece of your estate plan.
Sub-Trusts are Irrevocable Trusts created at your death and are not to be confused with Revocable Trusts that you create while you are alive as an alternative to writing a Will.
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*Certain estate planning tools exist to deter someone from suing your assets, including “no contest” or “in terrorem” clauses. These tools can be implemented in a Will or a Trust with the advice of an attorney.
The chart below summarizes the overlap and differences between a Will and a Revocable Trust in most U.S. states.
No matter how many fans, followers, or friends we have in this life, at some point we’re all going to die. Here are some of the most common questions people have about what happens to their social media presence after they’re gone.
A: The short answer: Nothing. Not automatically, anyway. Unless you take steps to outline your wishes—or adjust some simple settings on Facebook—your accounts will remain visible and “active.”
A: As with your financial accounts, you’ll want a secure way to provide usernames, passwords, and any multi-factor authentication information to the person you designate. Remember, your Will is not the best place to reveal this information because it can become part of the public record.
There are many options for securely storing your social media access information, but we hope you’ll consider using our bank-level encrypted Vault where you can feel confident filing any important documents you want secure cloud-access to.
A: Each social media platform has its own policy concerning the accounts of people who have died. They are all likely to evolve over time as this issue becomes more and more relevant. In less than 50 years, Facebook will have more dead members than living ones, so it’s not a problem that can be ignored.
In Facebook’s General Account Settings, under Memorialization settings, you can request to have your Facebook profile permanently deleted after you die or identify a Legacy Contact to look after your account. That person can accept new friend requests, manage tribute posts, delete posts, change the profile picture, and remove you from tags, but they cannot see your messages or add or remove friends.
Instagram, Twitter, and LinkedIn accounts don’t yet have the same “legacy” option. However, those accounts can be deleted by a direct family member or person you’ve designated as your power of attorney by providing proof of your death.
A: Figuring out the future of your Facebook page may seem like a slightly silly discussion topic amid all the other important end-of-life decisions you need to talk about with your family. But as with many things concerning your estate, they are the ones who have to live with the decision. Talk with them to see how they feel. A couple things to think about: Some family members might think of your social posts and photos as akin to a diary and would never consider deleting something so priceless. On the flip side, those helpful birthday reminders and “you have memories” notifications that social sites send could be painful, especially while your loved ones are still grieving. Keeping a social media page but having the legacy contact turn off notifications can be a good compromise.
