Good morning, folks. It’s Andy Stautz with Stautz Law, and I am back for another talk about Indiana probate and estate planning. Today, we’re talking about personal representative privileges. Really, personal representatives’ lack of privileges.
Background: What Does the P.R. Do?
So, a little bit of background. The personal representative is the person in a probate estate who is in charge of running the show, right? This is a synonym of executor, if you’ve heard of that. Okay, so the personal representative is appointed by the court in both a supervised and an unsupervised estate. And they’re given these letters, letters testamentary, letters of administration, depending on the case, that gives the person legal authority to go gather up the decedent’s property, you know, set it aside in this separate estate account, manage the accounts, you know, settle claims, all of this.
The Personal Representative Doesn’t Get a Bigger Share
The biggest single issue I run into with choice of personal representative or with heirs, heirship situations, you know, is when heirs are suspicious, like, does the personal representative get extra, right? Like, should we fight to be the personal representative because it’s like a privileged position?
And the answer very generally is no. Okay, the personal representative doesn’t get an extra share of the estate. So if there are, let’s say it’s an intestate estate, there’s no will, there’s just three adult children. Okay, the three adult children are going to get equal thirds, and the child who decides to be the personal representative doesn’t get half all of a sudden, okay, they still get equal thirds.
So the choice of personal representative does not affect the basic distribution scheme.
The choice of personal representative does not affect the basic distribution scheme.
Personal Representative Fees are Not a Windfall
That said, the personal representative is allowed to take a fee, basically like an hourly rate for his or her work doing the personal representative duties, right? Because It’s a lot of paperwork. It’s a lot of administrative time. You know, you got to deal with, me, the lawyer, whatever. You got to be on the phone with a lawyer all the time. So it is work. It’s a job. And the personal representative is allowed to take a reasonable fee for that work. In general, though, and personal representatives’ fees are a big topic, I suppose, but In general, it should be indifferent, right? It should be, the fee should be just enough to compensate for the work so that anybody would take it or leave it, right? It needs to be about, it needs to be about like that. So it shouldn’t be like this big bonus to the personal representative. So that’s where, when I say it doesn’t change the distribution to be a personal representative, And yes, you get a fee, but the fee is just to make up for the work, and it is a lot of work.
The Personal Representative Job is Not Worth a Fight
So there you have it. So the basic, I guess the point of recording this talk is to say, most of the time, for most people, You don’t need, siblings don’t need to fight about who’s going to be the personal representative, or heirs don’t need to fight about it.
Because, you know, for someone who isn’t the personal representative, you can pretty much just sit back, keep an eye on things, but just wait for your distribution at the end. You know, review the accountings and such to make sure it’s going right, but it’s easier not to be the personal representative, right?
And that presumes that the personal representative who does serve is a diligent, responsible person. So, if you’ve got your pick, you want, you want the most like business-like, check the box, diligent child. We’ve talked about this in other talks, right? You don’t want someone debilitated by grief. You also don’t want someone who has no fixed address. But, you know, as long as the personal representative is suited to the job, And as long as the, estate counsel, the probate lawyer is, honest and upstanding and trustworthy, (me) it’s easier not to be the personal representative. Being the personal representative is an important job. You got to do it right. But it’s work and it shouldn’t be like there are no, there are not such special privileges that it should be like a prize to be fought for.
Conclusion
Okay. So I suppose that was a basic overview, but the key question is, does the personal representative get an extra share? No. Do they get a reasonable fee for their work? Yes, but I think you’d have to be pretty silly to take on the job just for the fee, right?
Most people do it because they want to honor the decedent and make sure their affairs are taken care of diligently and fairly.
That’s all I’ve got for today. Thanks for listening. And if you’ve got any questions, you’re probably on my website. Give me a call, give me an e-mail. I’d love to talk more about your specific situation.
Want to talk more?
Call for a free consultation about your estate planning or probate needs.
Hi folks, it’s Andy Stautz at Stautz Law. I am back for another talk about Indiana probate. Today’s talk is how to find the will, which is a problem that comes up more often than you’d think.
Basics: Deciding if Estate is Testate or Intestate
But the first step in administering a decedent’s estate is deciding whether there’s a will or not and presenting the will for probate when it’s time to do so. You need to know if there is a will and you need to find it.
Best Practice: Plan Ahead
The best way is, of course, for the decedent, the person who made the will, the testator, to have told other people where the will is to be found and make sure those people, whoever it is, the designated personal representative, ideally, or just a family member, someone, can get to it.
So I always tell my estate planning clients when they take their wills home: put it somewhere safe, but also somewhere where your people can find it when they need it. So not a safety deposit box at a bank that only you know about, for instance. That’s not useful.
Obviously, there’s a desire for privacy and secrecy, and some people take that pretty far and it causes their heirs problems. It’s a behavioral risk. So best case scenario, we know where the will is because someone was told and they go find it. It’s great. Okay.
Other Possibilities: Will is Lost
Obviously, a will can be just straight up lost. You know there was a will, but it’s gone. There are ways around that. including having witnesses come forward and describe the circumstances. I’ve talked about that in a separate talk. The problem with those aspects is how sure is the, you know, when you’re going to look for a lost will, how sure are you that there actually is a will?
When you’re going to look for a lost will, how sure are you that there actually is a will?
I hear over and over again a client or a lead say, I’m sure he made a will. He crossed all his T’s, he dotted all his I’s. He was that kind of person. And unfortunately, you know, it’s all too common. Sure, you think you’ve done everything, but that doesn’t mean it really existed or that they really got around to it. Because people procrastinate about these things. Okay, so that’s #2.
How to Get the Will from Someone Else
Number 3 is You think there’s a will and you think someone else has it. What about that? Well, the good news is you can open a probate, you can open a probate administration and then use the court’s power to call the will forth. So one way to find the will is to open a probate and then apply this section, Indiana Code 29-1-7-3, Produce will in court, contempt damages. So basically you demand the will from whoever you think has it and they have to show up with it on penalties of contempt. So that’s a possibility too. A bit more of a rare situation.
I’d say the most common are the person who made the will hid it too well or There actually isn’t a will.
Informal Search for Will
And then there are, of course, the issue of the old lawyer who’s got a bank full of wills in a building somewhere and then retires. And the original will is in some lawyer’s files that hasn’t been seen since the 70s. So in that case, it’s kind of a game of telephone. You kind of put out the word and say, has anyone seen the last will of? Does anyone remember working with? But that’s informal, infrequent, and doesn’t often work. So that’s kind of last ditch.
Conclusion
Hope that talk was useful in terms of just the general landscape of finding a will. Obviously, for specific legal advice, you need to actually consult with a lawyer and not just watch informational videos. You’re on my website, so you can give me a call. You can e-mail me. I’d love to talk about your specific situation. Thanks for watching. Bye for now.
Want to talk more?
Call for a free consultation about your estate planning or probate needs.
Hello, it’s Andy Stautz at Stautz Law, and I am back for another talk about Indiana estate planning and probate. Today’s talk is just kind of a general informational discussion of how the intestacy rules work.
Just because the surviving family members want, you know, want everything to go to the kids and nothing to go to the spouse. Or there’s a predeceased child and so there are grandkids and the surviving adult children don’t want anything to go to the grandkids. That’s not how the rules work.
You know, the intestacy rules are optional in the sense that you can make a will to get around them. But if you fail to make a will, if there is no will, then the estate administration has to proceed according to the intestate rules. There’s no, oh, we all, you know, that’s not what he wanted, for instance. You know, it’s not optional in that sense.
Exceptions to Intestacy Rules
Now, I put an asterisk on this for two reasons. One, obviously you can make a will. right? The intestacy rules are entirely optional in the sense that you can write whatever you want into your will.
The other part of the asterisk though is sometimes if everybody really does agree, you can get around the intestacy rules using a family settlement agreement, which is a provision in the Indiana Code that lets you basically agree to compromise a controversy about estate administration. Now that’s subject to court approval, obviously, and it’s also subject to everybody agreeing, which, you know, can be obstacles in a lot of the cases.
Effects of Non-Optional Rules
So I guess what I’m getting at is for people who are unhappy with how an estate administration is going or unhappy that there was no administration at all, or there’s family contention there, the favorite son or daughter doesn’t get to decide what’s going to happen just because there’s no will or doesn’t get to decide what seems reasonable to the family. There are rules about this and you need to make sure that they’re followed.
That could mean that you as an heir or a potential, in analyzing an heirship situation, an inheritance, you might have more rights, you might have less rights. But you can’t just take a person’s word or opinion at face value there. So that’s what I was trying to get at with this talk. Obviously, that’s very general kind of background information about like how the law works. If you want specific advice, you need to talk to a lawyer about your specific situation. I’m happy to do that. Give me a call. And that’s all I have for today. Thanks. Bye.
Want to talk more?
Call for a free consultation about your estate planning or probate needs.
Good morning, it’s Andy Stautz with Stautz Law. I am back for another talk about Indiana probate and inheritance law. Today’s talk is very specific and it’s to answer the question, who is a child for the purpose of Indiana inheritance law?
So… Kind of one of those issues that doesn’t seem like a big issue until you are at the margins, until you get to these close calls.
So who’s a child? Obviously, an ordinary biological child to married parents, definitely a child.
Statutory Definition
From there, it gets a little more complicated. We’ve got a definition in the law. So Indiana Code 29-1-1-3. Definitions. Definition (a)(1), the very first one: “Child includes an adopted child or a child that is in gestation before the death of a deceased parent and born within 43 weeks after. The term does not include a grandchild or other remote descendants, nor a child born out of wedlock, except as provided in IC 29-1-2-7.” Okay, that was mostly a direct quote. I left a couple things out.
So if a child has been adopted, great, they’re, boom, legally a child for inheritance purposes. Because we’re in the probate code here, by the way.
Doesn’t include grandchildren. Okay, that makes sense, but good to have it there.
And it is, as you might suspect, gendered. So basically you definitely inherit from the mother; on the paternal side, only if paternity is acknowledged. That’s broad strokes. I don’t want to get into the details.
Other Circumstances: Step-Children, Non-Adopted Children
Then you’ve got the weird question of, okay, that handles adopted children and handles biological children, both married and unmarried. What about not-adopted children? So what if someone comes and says, well, it’s a stepchild. Or it’s a person who lived in the house and was raised as a child, but wasn’t like wasn’t formally adopted and isn’t and has no biological tie.
The answer in both of these cases, according to just the terms of the statute, is sorry, not a child. The Indiana Probate Code really is focusing on, you know, bloodline or legal formality. There’s no concept here of, well, we can decide that, they’re basically a child, we treat them as a child.
Obviously, there are equitable arguments there. You know, you never really know, get lucky with the case law. Maybe there’s a way to sort of bring those other people into the orbit of the probate code. But it’s an uphill battle, right? The statute as defined doesn’t include those edge cases, even if socially or morally or whatever, we would say, oh yeah, it’s the person’s child.
Avoiding Statutory Definition: Pick Your Own Heirs
So that’s pretty harsh. That’s a pretty harsh consequence, I think, in some cases.
Fortunately, though, or the nice thing is, you can avoid that. You can avoid that by having a will or having a trust. Because remember, the probate code rules for what children inherit are just the default intestate rules. If you write a will, you can say, my stepchild gets, you know, shares equally with my biological children.
Or, you know, John Doe, whom I have reared as my own, you know, is my sole heir.
Whatever you want to do. So that’s kind of the tension, right? The probate code, the default rules have to draw a line somewhere and you might not like where that line is. That’s why you do planning in advance.
Conclusion
So hopefully that was helpful in just kind of discussing both the intestate situation and giving you one more great reason to make sure you’ve got a will. But general information about the law is not a substitute for legal advice. If you need an analysis of your situation or you want me to talk about your case, give me a call or e-mail me. You’re on my website. I hope that talk was helpful though. And that’s all I have for now. Bye.
Want to talk more?
Call for a free consultation about your estate planning or probate needs.
Good morning, folks. It’s Andy Stautz at Stautz Law. I am back today for another talk about Indiana estate planning. Today’s topic is why new parents need a will. And this is a topic near and dear to my heart, because a few weeks ago my wife and I welcomed our first child.
So we’ve recently redone our estate planning and lots of our friends are in similar spots. You know you’ve got kids, maybe new babies. Or maybe you’ve just been meaning to do it for a while. And it’s like. OK. Why is this on your To Do List?
So I’m going to go through the what I think are the the biggest, most salient reasons. There are probably others. But I’m thoroughly persuaded all new parents need a will. Why?
Reason #1: Avoid Leaving Property to a Baby
Reason #1 as soon as you have a baby. Your baby is now a 50% intestate heir if you die. That means if you die without a will the day after your baby is born, your baby is entitled to half of your property, not your spouse. Well, your spouse gets half, but your spouse doesn’t get everything. Is what I mean.
A lot of people assume that their spouse is going to get everything. It’s not true. I made a video about that like a few weeks ago. So number one reason is to override the rules that you would get if you didn’t have a will.
And the reason you want to override those rules is because it’s really inconvenient for a child to get a bunch of property. I mean you need to establish a guardianship for that property. And you know, if one spouse is still living, it’s not necessarily a huge deal, but it’s probably not what you want, not what you want to be dealing with. You know your spouse is going to be having the worst time in their life, right? You don’t want to be there trying to like set up that stuff.
So avoiding intestate succession, avoiding guardianship.
It Doesn’t Need to Be Complicated
You know you can put a testamentary trust in your will, so you don’t need to do a full, expensive trust planning right now. You just need a back stop. Like OK worst case scenario. You know, we’ve got this will that says where the property goes and in the case of both spouses dying, you can set up a trust like in the wills themselves, an emergency last minute, here’s what it does. Again avoiding guardianship, putting some structure around the inheritance so that you’re not leaving your child with a mess or a lump sum inheritance or whatever.
Designating a Guardian for your Child
And the other reason also related to Guardianships is. You should use the chance in your will to designate a “guardian of the person.” So who’s going to raise your child? You know, that’s the remaining spouse, but in the event of a common disaster you want to. If you’ve got, if you’ve got an opinion on who raises your kid, you probably do. You know, you should put it down there
So. Like I said, it doesn’t need to be complicated. I’m not saying every new parent needs to like. Come up with some complex plan. You know, do a trust administration, any of this. Just having a will to override the “half to kids” intestate succession half to spouse, half the kids just like. Having a will that says “all to my spouse.” It’s just a really important backup plan.
Is It Worth It? Expected Value of Having a Will
And you know, we can, we can price out the expected value of that. You could say, OK, well, what’s the risk one of us dies while our children are minors. You know, whatever you think that risk is, if you’re an actuary, you can figure it out. What’s the cost? If we mess it up, we don’t have a will. OK, what does it will cost, you know, and I think it’s like insurance, right? It’s a backstop. It’s a worst case scenario plan. But the expected value is positive. You would be really glad you had it if you need it and hopefully you don’t.
Building Good Habits: Beat the Procrastination
And lastly is you know it’s a start, right? For lots of people life events are triggers to start doing estate planning which they’re going to need to do at some point. And so it’s kind of good to have something down that you can revise later versus, you know, being older, having more complicated property and family affairs, trying to do everything for the first time. You know, you’re a grown up. Time to have an estate plan. It’ll save your family and loved ones legal trouble and emotional trouble.
Conclusion
So that’s the pitch. Get it done. You know. Hire an attorney or or do it yourself, get something done. I think hiring a professional is worth it, but you know, cash is tight. That’s up to you. OK, that’s what I’ve got today. I think I’ll do a follow up on a “to do list” that includes more than just the will, because there are a couple of other things you want to do to make sure your property affairs are in order. That’s all for today. Thanks for watching.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.
Hi folks, it’s Andy Stautz at Stautz Law. I’m back today with another talk about Indiana estate planning. And today is going to be a quick one, but a very important talk. I have seen lately on social media, you know, Reddit, Nextdoor, kind of these local social platforms, people talking about Indiana intestate succession rules and getting it wrong.
“It All Goes to Spouse?” No! Think Again!
So you see things like “if I die without a will what happens? What happens to my stuff? Do I need a will if I’m just leaving everything to my spouse?”
And there is apparently a persistent, pervasive belief out there that if you die your spouse gets everything by default. That is not the law in Indiana. OK? That’s wrong. It’s not true that your spouse gets everything when you die by default. If you have kids, your kids get 50% of your intestate estate, so spouse gets half and kids get half.
That’s a very different outcome, and most people don’t really want that right?
How to Make It So Everything DOES Go to Spouse
Most people who are married with kids want their spouse to get everything first. And then the surviving spouse gets to decide how and when it goes to kids.
So if you want it to work like that, you need to make a will or a trust. You need to do some estate planning, you cannot rely on the default if what you want is everything to go to your spouse.
Reasons to Plan Ahead
We can talk about why you don’t want half going to your kids right away, but I think most people understand that intuitively, right? You do not want minor children to come into large sums of money because then you need to manage those assets for their benefit until they’re 18 and then when they turn 18, they have access to the money. Same thing with adult children. You know, maybe you don’t want your adult children getting an inheritance right away when you’re still trying to provide for your surviving spouse.
And there’s potential conflict there, right? I’ve had a few cases where families have agreed to put inheritances in trust to kind of restrict access, after the fact, when there wasn’t good enough estate planning, but that depends on everybody getting along and depends on the children kind of signing away their right to immediate access to the money.
So you know it’s a problem we can solve sometimes, but it adds a risk of conflict. So you want to avoid that, right? If your plan is everything to my spouse, that’s a great plan, but you need to make documents to do it. You cannot rely on the default rule, because the default rule is not all to my spouse.
And I’ll certainly add a reference to the intestate law. I.C. 29-1-2-1 So you can see what the law actually is.
I don’t know where this… I don’t know where this belief came from, but it’s out there.
So I hope I’ve set things straight and that’s all for today. So give me a call or book your appointment online. We can talk about your estate planning. I’d love to write your will or trust and get you set up correctly. All right. Thanks for watching. Bye now.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.
Good morning, folks. It’s Andy Stautz at Stautz Law. Today we’re talking about estate planning. And the question is, do you need a will when the intestate rules would accomplish the same disposition?
Wills vs. Intestacy in General
So let’s break that down a little. Intestacy is when you don’t have a will. The intestate rules, then, control who gets your property. And the intestate rules are, as we’ve said before, the Indiana State Legislature’s best guess at what people want to happen. So you know. Yeah, your property goes to your relatives, to your spouse, if you have one; to your children, if you have any. If you don’t have children or a spouse, your grandchildren. If you don’t have any descendants or spouse, you know your parents, then your nieces and nephews. Kind of increasingly distant relatives.
Obviously a will if you have one overrides the intestacy rules, so you can leave, you can use a will to leave it to anyone, not just your family.
What if Intestate Disposition is Fine?
The situation comes up sometimes though, where someone wants … someone has, you know, just a spouse. No parents, no kids. Do they need a will to leave everything to their spouse? because the intestate rules would leave everything to their spouse anyway?
Or, you know, they just have adult children, no spouse, no parents. Everything will go to their adult children. Do they need a will to to do that?
Considerations Before Planning Not to Plan
This is one of those areas where the actual solution is legal advice. It depends on your situation.
1. Possible Family Changes
But there are some things to think about just generally and one would be: how sure are you that your family situation is going to stay the same as the intestate situation? So you know, if you got remarried, if you had another kid… If you forgot about someone … you adopted a stepchild and don’t remember that you did it, and now you know… Whatever.
So with intestacy, you’re just kind of at the mercy of what the rules are and what the family is when you happen to die. With the will, you lock it down. You say, OK, this is who it’s going to. So that’s worth something.
2. Powers to make administration easier
Also your will can give powers to your personal representative to make administration easier. And that might be worth it to you. You know, we’ve talked before about how you get unsupervised administration and why you might want to do that. Well, you can do it if you’ve got the consent of all intestate heirs. But you know, if there are many heirs or if they don’t quite get along, you know, the will can say “I authorize my personal representative to do it unsupervised.” So you just kind of remove that question, remove that obstacle and that saves you money on the back end and it saves your heirs money. I suppose you know, maybe you don’t care at that point, but it makes things easier.
3. Forestalling conflict and uncertainty
And then the third thing is closely related to that… in addition to locking down your disposition, giving your personal representatives powers to make his or her life easier, you also reduce the risk of conflict. With intestacy, you don’t know who’s going to come out of the woodwork. There’s always a little bit of doubt, you know. Did we find everybody? And you know. OK, what are the shares? how are we going to administer it?
With a will you say “Nope. Here’s the universe. These are my beneficiaries” and you kind of give more certainty to the whole administration. There’s no wondering. “Oh, is there a will out there we forgot? Is there an heir out there we forgot? Is someone going to come up later and challenge this? You know, having the will, even if the disposition is the same, kind of forestalls all that conflict and says. Nope. Here it is.
So that’s kind of three reasons. I’ve just given you for why you might still want a will. Even if you think intestacy is going to work correctly for you. … It’s probably worth doing. Again. You know, specific to your situation, I can’t give you legal advice in a general talk like this.
But these are the kinds of things I talk about with my clients at our planning meetings and usually the planning pays for itself. If you, you know, if you forestall even a small fight or you make things a little easier on your personal representative. It’s going to save in the long run.
I hope that’s given you some idea and what’s helpful. You can call me or book your appointment online and I look forward to talking to you about this or any other estate planning topic. Thanks and bye for now.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.
Good morning, folks. It’s Andy Stautz at Stautz Law. Today I’m back with another talk about a common estate planning question or it’s really a kind of an estate administration question. And that is a handwritten will or what lawyers call a holographic will.
What is a Holographic Will?
Holographic is just a fancy legal term for handwritten.
Common Reasons for Holographic Will
So a lot of times you’ll see this for people who maybe don’t trust lawyers and they want to do it on their own. So they’ll, you know, write out their own will, they were probably more common back in the day before you had computers and you could just print stuff all the time.
Or someone maybe, maybe in their last illness they don’t have time to do formal things. And you know, they’ve got maybe a notebook or a diary and they write a page in their diary saying, you know, “I want the house to go to so and so.”
Is a handwritten will valid in Indiana?
So the common question is, OK, well, in Indiana, are holographic wills valid? Is a handwritten will valid in Indiana? And the answer to that is a handwritten will is not special in Indiana, so it’s valid if it meets the other requirements for validity.
Requirements for a Handwritten Will
That means it has to be witnessed. You know, and signed. If there’s a self-proving clause, great (But I’ve never seen one on a handwritten will.) So it doesn’t matter. Your will does not need to be printed on fancy paper. You can handwrite it, but you still need 2 disinterested witnesses.
Handwriting Alone Not Enough to Prove Validity
Unlike some other states, some other jurisdictions, or you know, way back in the day, the fact that it’s in your handwriting alone is not enough to prove you know, to make it valid, to prove that it’s yours.
So that really trips people up a lot. You know, if you if you go into probate and you say, well, you know, “mom left everything to so and so” It’s like, well, you know, there’s probably a moral obligation or an equitable obligation…. that that was her last wish, but last wishes that aren’t embodied in valid documents aren’t going to hold up in court!
Estate Planning to Avoid Handwritten Will Problems
So on the planning side, that’s a big oopsie, right? You know, that’s a disaster. You wanted something to happen and it didn’t work because you didn’t do the legal formalities.
It leads to lots of conflicts too, because then you’ve got, you know, the person with the handwriting in their favor… They’re not going to get along with the intestate heirs, that is, the people who get the property if there is no will at all.
So you’re asking for trouble.
But short answer to the question: a handwritten will in Indiana is valid only if it meets the other requirements for validity. Nothing special about handwriting.
(There’s a tiny exception for, you know, like immediate death, like battlefield situations. But that’s not relevant pretty much ever.)
So I think that’s all I had to say on that one. It’s just kind of a cautionary tale. Don’t assume that because it’s in handwriting that it’s going to be valid. Just the cost of the probate, much less the fighting it causes… You know, doing a little bit of planning ahead and making sure you’ve got your documents is going to forestall this so that we don’t have to deal with this question in your estate.
That’s all I’ve got for today. Thanks for watching and I hope it’s been helpful. You can call me or book an appointment online if you want to talk about this or any other estate planning or state administration topic. Thanks. Bye.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.
Hi folks, it’s Andy Stautz at Stautz Law. Today I’m back with Part 2 of our discussion on estate planning for young adults.
So in Part 1 I talked about kind of the trade-offs, the balance between, you know, the complexity of your family and property situation versus the cost and time of doing formal estate planning.
Today we’re talking about specific situations, some like real basic plans.
So if you’re a young adult, let’s say you’re 30, you’re not married, you have no kids. Your plan could be really simple. It can be, you know, beneficiary designations on your retirement account; transfer on death deed for your House; and then a will to just take care of whatever is left. That way the bulk of your property is going outside of probate. You can probably use the small estate affidavit for the rest. Great.
As soon as you get married the situation changes. Your spouse becomes, you know, number one person by default on your healthcare representative. Your intestate heir. So. For a married couple, the same scheme can work for property. Healthcare decisions probably made mutually. Uh, but it’s just something to keep an eye on. You know, when you get married, that’s a big change because your spouse instantly steps in to, like, all the roles.
(So… I’ll probably do a follow up video on when to change your estate plan or like when to revise. Start thinking about it and marriage is a big one. So is divorce. So is having children.)
The same scheme can work for a married couple, you know, just beneficiary designations take care of a lot if your property is mostly retirement accounts and house.
Uh. Situation changes if you have rental properties. Because you should have those in an LLC (If you don’t talk to me about that separately.) Your interest in an LLC is a probate asset unless you do more, so that’s probably trust time.
It’s also trust time if you have kids, because once you have children. They become your… or you know they have an intestate share right away, even though they are minors and can’t. You know, do anything with it.
So if you don’t want to accidentally leave a ton of property to children requiring a guardianship, if there’s no surviving adult responsible. And if you don’t want to leave a bunch of money to someone the day they turn 18. (Usually, Yikes, But, you know it’s your own decision to make, I guess) A revocable trust makes tons of sense for married couples with children because it lets you set thresholds for distributing your assets to your minor children over their lifetime. You can set up discretionary educational trusts in your revocable trust. So you know, usually that’s worth it. UM. It’s a lot more flexible, a lot more private, a lot easier to administer than a testamentary trust, which can go in a will
(Kind of old school that some people will have a will and then the will says. Oh by the way, if my beneficiaries are minors then you know create this trust for them. It’s like, well, it’s better to have that done beforehand because then you avoid probate, you keep some privacy. And you can you can be a little more elaborate in your planning, then, too. . . . .Although there’s no theoretical limit, I guess, even in a testamentary trust, but… Personal preference I suppose. Anyway, that’s an aside.)
So those are some basic those are some basic schemes you know for single people. UM, it can be easy. Hopefully you can do it, most of it, outside of probate and then just a simple will. For married couples, and especially married couples with children, it makes sense to get some trust in place there.
And again, business interests are a biggie, so if you’re, if you’re running your own business, that needs special thought and that instantly puts you into the “Yep, have a plan.” Versus just a W2 wage earner. Or two.
So I hope you’ve enjoyed this brief overview. Obviously everybody’s personal situation is different, so come in for your planning meeting. We’ll talk about your situation and then based on what you need. You know that’ll that’ll determine. Where exactly we go from there, but that gives you an idea. Hopefully that’s enough to go on and start reading about if you want more education, but you can book online here on stouts law or you can just give me a call. Love to hear from you and talk to you about that. Thanks and bye.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.
Good morning, folks. It’s Andy Stautz with Stautz Law and we are back today with another estate planning talk. Today’s topic is estate planning for young people, young adults, really. Because I’m a young adult, lots of my friends are young adults and so I get the question all the time: “Hey, Andy, if we came in to you for an initial planning meeting, what would you recommend? What do we need to be doing right now?”
You know, obviously that’s a complicated question because everyone’s situation is different. But there are enough similarities between young adults that it’s worth talking about the the basics.
So consideration #1 is: What is your property? I mean, how much do you have to protect and is it worth going to any trouble about it — because you know maybe you’ve been in grad school through your 20s, or maybe you’ve been, you know, kind of finding yourself, trying different careers; who knows what you might be 30 years old and have no assets. Well, then, you probably don’t want to be paying an estate planning attorney to come up with a plan for you, because why!?
But as you start getting more, I think you need to keep an eye on that because some, some, some young adults, married or unmarried, get into their 30s and OK, you’ve got some retirement accounts. Maybe you’ve got a house, you know, rental properties, if you’re into that. So as you start amassing wealth, as you start doing well for yourself, that’s great. And that’s when it starts, you know, OK, you probably don’t want all of this escheating to the state or accidentally going somewhere you don’t want, or costing your family tons of money in probate. So that’s trade off #1
#2 is kind of: “OK well, how how does your situation relate to the default rules?” Because as as I’ve discussed in my other videos, you know, “do you need a will?” You know, “do you need an estate plan?” There are default rules. There is intestacy. There’s a priority of healthcare decision makers, so. If you’re unmarried and childless. You know, maybe those default rules do a pretty good job for you.
If you’ve got preferences that are different, you know, especially if there’s conflict with your family — because If you are unmarried and childless, your parents are still kind of your number one beneficiaries and your number one decision makers if you’re incapacitated –so you know if you want to avoid that for whatever reason, you know, then that that weighs in the balance in favor of, “OK, you need some deliberate estate planning.” And I’ll cite the I’ll cite the actual law in the written version of this, just so you have it.
So that’s kind of Part 1 of the discussion is how much do you have to protect and how do your preferences relate to the default preferences? Because if you don’t have a lot and your situation is well handled by the default rules. You know, what’s my recommendation for your estate plan? Not a lot, you know. Making a will if you can afford one, making sure of your beneficiary designations are a big one. You know, if your only asset is a retirement account, it’s like OK well. Go on your own. Make sure the beneficiary designation is who you want it to be. You can do that yourself. You don’t need to… You don’t need to pay anyone to do it.
Yeah, so closing thought for today then is, yeah, the more complex your situation gets, the more property you amass, the more it’s worth it to to sit down and have a planning talk. And. That’s when the the the balance starts to come out in your favor of. OK, yeah, it’s an upfront cost you need to budget for it. You need to have free cash flow to meet the planning expense. But it’ll, you know, the more property we’re talking about, the more you’ll save on the back end and you know, the better that works out for you.
So those are big considerations. That was Part 1 of this talk. I’m going to break it into two parts and then Part 2, we’re going to talk about some specific dispositions and planning recommendations that I’m often making. So stay tuned for that. Bye now.
Want to talk more?
Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.