Nearly everyone has an estate. An estate includes everything you own— car, residence, other real estate, checking and savings accounts, retirement accounts, investments, life insurance, cryptocurrency, precious metals, furniture, personal possessions, etc.. To ensure your wishes are carried out regarding your estate when you pass away or become incapacitated, you need an estate plan. Without an estate plan, your estate will be distributed according to state law.
An estate plan provides instructions about who you want to receive something of yours, what you want them to receive, and when they will receive it. The plan is created so the least amount is paid in taxes, legal fees, and court costs. A typical estate plan includes the following core documents, among others:
- Living Trust,
- Power of Attorney for Finance,
- Advance Health Care Directive, and
- Nomination of Guardian.
Trust administration is the private alternative to Probate. It involves transferring control of trust assets to the successor trustee. The successor trustee is then responsible for notifying the beneficiaries of the settlor’s death, collecting and accounting for the trust estate assets, paying taxes and the administration expenses, and distributing the trust estate assets according to the terms of the trust.
The successor trustee is not legally required to retain an attorney to assist with administering the trust, but many choose to do so. This is because trust administration is highly regulated by the IRS and state law, and trustees have many legal duties to the beneficiaries that they must fulfill, so the expertise of an estate planning attorney is strongly recommended.