Estate Planning Categories: An Overview

June 2, 2017

When people first meet with estate planning attorneys, the experience can prove overwhelming. There are a great number of ways to approach the creation of a reliable and well-crafted estate plan. Yet there are so many considerations. As a service to our clients, we are sharing a high level overview to our approach. While these estate planning categories won’t accommodate every clients individual needs, they provide a broad structure for understanding our overall approach.

Our First Estate Planning Meeting

When first meeting with clients, we discuss general approaches to estate planning. We ask lots of questions to understand our clients’ background, family, assets, and other issues or circumstances that may affect his or her estate plan. We listen closely as to identify key issues and evaluate how best to craft the right estate plan for an individual’s circumstances, needs, assets, and aims. Through this exploration, we can usually determine what type of estate plan makes the most sense for a client’s situation.

Estate Planning Categories

1. A Last Will and Testament Only Plan

This is where the only document we are preparing is a Last Will and Testament. Rarely is a Will alone sufficient, but sometimes, for various reasons, a client will only complete a Will. A Will alone normally requires probate after death and only address issues after death.

A Will with a Trust is a popular choice for younger adults with young children, as a less expensive way to set up a probate based plan. A Will with a Trust will provide for guardians and trusts for younger children if there is an unexpected death of the parents.

2. A Last Will and Testament plan along with Powers of Attorney

A basic plan with a Will along with a Durable (Financial) Power of Attorney and a Power of Attorney for Health Care, addresses issues after death, and through Power of Attorneys, financial and health care issues if the client is unable to make these decisions during lifetime. Depending upon the assets involved, this approach will not normally avoid probate. It’s typically less expensive to establish in the short term, but may increase attorney fees later after death due to probate. (This plan may make sense where a client wants to spend as little as possible on attorney fees now, and is not concerned with increased costs and expenses due to probate upon death.)

3. Transfer on Death Deed

A Transfer on Death Deed can sometimes be used to transfer real estate to beneficiaries without probate. As a supplement to a Last Will and Testament plan, along with Powers of Attorney, a Transfer on Death deed can be used to name a beneficiary or beneficiaries on Wisconsin real estate. Yet if there are multiple beneficiaries, minors, or other issues, we may not suggest this course of action to avoid probate. Too often, the improper use of a Transfer on Death deed creates more problems, costs and expenses after death than it. Usually a Will-based plan or a Revocable Trust plan is used along with a Transfer on Death deed. However, in limited circumstances, a Transfer on Death Deed may allow the avoidance of probate without a trust.

4. Revocable Trust Plan

A Revocable Trust plan normally includes all of the items listed above, plus a revocable trust and supplemental documents. A Revocable Trust plan is one of the more popular plans as it maintains control, flexibility and can avoid probate. A Revocable trust plan can be easily updated and amended. There are many different variables that may make a Revocable Trust plan the most appropriate, such as avoiding probate and other family or asset issues. As upfront legal fees are higher with a Revocable Trust Plan, we discuss the advantages and disadvantages with our clients before deciding upon a course of action. We always recommend what’s in our clients’ best interest given all of the facts and circumstances.

5. Irrevocable Trust

While Irrevocable Trusts are created for many reasons, we will discuss why Irrevocable Trusts are sometimes utilized to protect select assets from nursing home and other long term care costs. This is a very complex area of law that intersects many different facets of the law, including estate planning, advanced tax laws, Medicaid, other long term care laws, and nursing home laws. It’s important to note that an Irrevocable Trust requires a full five years for creation and funding.

6. Special Needs Trust (Supplemental Needs Trusts)

Special Needs Trusts and Supplemental Needs Trusts are usually utilized to hold a disabled child’s or grandchild’s inheritance to avoid the loss of government benefits such as SSI, Medicaid, or other helpful governmental programs.  As part of our initial conversations, we will talk about the specific needs of and benefits that a disabled child or grandchild may have, and if a Supplemental Needs Trust is required or appropriate.

7. Other Estate Planning Discussions

We will also discuss other areas that impact how we proceed depending upon assets, including specialized Retirement Trusts, Irrevocable Life Insurance Trusts, Marital Property Agreements, Funeral Authorization Directives, how beneficiary updates fit into the trust plan, asset titling, and other areas and laws that come into play depending upon the issues that need to be addressed.

In short, during our first estate planning meeting, we get to know our clients and begin the process of determining how to meet the client’s goals in the most cost effective way possible. Explaining these different broad areas of estate planning, and how they fit into each client’s situation, is a key first step in our estate planning process.

We’re Here to Answer Your Questions Too

Of course, we have written more about our estate planning approach elsewhere on our site as well. We invite you to contact us so that we can help consider what type of estate plan is right for you. Our attorneys will work with you to determine what estate planning tools and options are best for you.

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This article is intended as general legal information and not as legal advice to any particular client, nor is it intended as advice on any particular issue or matter. If you have any questions regarding the subject matter of this article, or wish to discuss how the subject matter of this article may apply to your situation, please contact us.