When Is It Time to Service Your Estate Plan

If you own a car, then you know it requires regular servicing in order to perform well and be reliable. More than likely, your car came with a recommended schedule for service, based on how many miles it has been driven; after a certain number of miles, you need to change the oil, replace the brake pads, rotate the tires, and so on.
If you have a newer car, you probably have an irritating dash light that comes on when it's time for service and stays on until the mechanic resets it. Either way, whether you pay attention to the odometer or rely on that dash light, it's pretty easy to know when it's time to service your car. And if you keep driving it without servicing it, it's a sure bet your car will let you down.
Like your car, your estate plan needs "servicing" if it is going to perform the way you want when you need it. Your estate plan is a snapshot of you, your family, your assets and the tax laws in effect at the time it was created. All of these change over time, and so should your plan. It is unreasonable to expect the simple will written when you were a newlywed to be effective now that you have a growing family, or now that you are divorced from your spouse, or now that you are retired and have an ever-increasing swarm of grandchildren! Over the course of your lifetime, your estate plan will need check-ups, maintenance, tweaking, maybe even replacing.
So, how do you know when it's time to give your estate plan a check-up? Well, instead of having mileage checkpoints, your estate plan has event checkpoints. Generally, any change in your personal, family, financial or health situation, or a change in the tax laws, could prompt a change in your estate plan. Use the following list to guide you.
It's a good idea to review your estate plan every year. Set aside a specific time every year (your birthday, anniversary, family gathering) to review it.

Event Checkpoints for Your Estate Plan
You and Your Spouse, If Married

• You marry, divorce or separate
• Your or your spouse's health declines
• Your spouse dies
• Value of assets changes dramatically
• Change in business interests
• You buy real estate in another state

Your Family

• Birth or adoption
• Marriage or divorce
• Finances change
• Parent or relative becomes dependent on you
• Minor becomes adult
• Attitude toward you changes
• Health declines
• Family member dies

Other

• Federal or state tax laws change
• You plan to move to a different state
• Your successor trustee, guardian or administrator moves, becomes ill, changes mind
• You change your mind

Should You Disinherit a Child?

Most parents choose to leave their estates equally to their children. But sometimes, parents intentionally choose to not leave anything to one or more of their children. There may be what the parents consider to be legitimate reasons, such as if one child has been more financially successful than the others, or not wanting a special needs child to lose government benefits, or not wanting to leave an inheritance to an irresponsible or drug-dependent child. And sometimes a parent wants to disinherit a child who is estranged from the family, or to use disinheritance as a way to get even and have the last word.

But regardless of the reason, disinheriting a child is hurtful, permanent, and will undoubtedly affect that child’s relationship with his or her siblings. Courts are full of siblings who sue each other over inheritances but even if they don’t sue, it is highly unlikely they will be having family dinners together. Finances aside, there is symbolic meaning to receiving something from a parent’s estate.

Disinheriting a child may be short-sighted and even completely unnecessary. For example:

• A child who appears to be more successful financially may have trouble behind the scenes. This child may actually need the inheritance now or in the future; fortunes can change quickly, marriages can collapse, and people can become ill. Consider that if you disinherit this child, you also disinherit your grandchildren by this child, unless you make specific provision for them in your estate plan.
• You may have a spouse, child, sibling, parent or other loved one who is physically, mentally or developmentally disabled—from birth, illness, injury or even substance abuse—who may be entitled to government benefits now or in the future. Most of these benefits are available only to those with very minimal assets and income. But you do not have to disinherit this person. You can establish a special needs trust that is carefully designed to supplement and not jeopardize the benefits provided by local, state, federal or private agencies.
• You may have a child who is irresponsible with money or is under the influence of drugs or alcohol. Consider that this child may actually need financial help now or in the future, and may eventually become a responsible and/or sober adult. Instead of disinheriting this child, you can set up a trust and give the trustee discretion in providing or withholding financial assistance; you can stipulate any requirements you want the child to meet.

How you choose to include your children in your estate plan says a good deal about your values and faith. Not disinheriting a child who has caused you grief and heartache can convey a message of love and forgiveness, while disinheriting a child, even for what seems to be good cause, can convey a lack of love, anger and resentment.

If you have previously disinherited a child in your will or trust and you have since reconciled, you need to update your plan immediately. If your decision to disinherit a child is final, be sure to discuss it with your attorney; he or she will know the best way to handle it in your estate plan. Finally, tell your child that you are disinheriting him or her so it doesn’t come as a complete surprise. Explaining your reasons will allow for honest discussion, may help deter the child from blaming siblings later, and may prevent a costly court battle.

The Best Estate Plan is No Match for Unprepared Heirs

 

Over the course of my career, I have encountered many families who were unprepared for the inevitable aging and loss of parents. These families experienced unexpected rivalries that threatened to cripple or destroy the very family unity and wealth that the parents and their estate planning attorney hoped to protect.

Well-drafted estate plan documents are designed to reflect clients’ instructions for passing their legacies to the right beneficiaries and providing for care of clients and their families. However, the best estate plan is no substitute for preparing heirs to deal with: changing care needs of aging parents and other family members, the complexities of estate and trust administration, and how to avoid elder financial abuse and prevent or resolve conflict among siblings.

Rivalries and conflicts may arise out of innumerable scenarios. For example, consider what can happen when one sibling steps into a fiduciary role while the parents are living and no longer able to manage their affairs unassisted or when a parent passes on. The new fiduciary and other siblings have no idea what Mom or Dad promised to other siblings. Misunderstanding and conflict can arise when monthly cash “gifts” from Dad to one sibling are suddenly cut off without notice or discussion because the trustee had no idea Dad was making these gifts; or a daughter claims Mom had always promised her all of the family jewelry plus an equal share in the balance of the estate. Without a process for communication and resolution, the next step is too often costly litigation and permanent breakdown of family unity.

Conflict is Inevitable. Anticipate it.
Decide on a Process for Resolving it.

There will be disagreements among family members. Whether disagreements are over relatively small or very significant issues, they are inevitable. What is not inevitable is that the family will know how to deal with disagreements and manage conflict. It’s how families prepare for and manage conflict that makes the difference.

Few parents want to think about conflicts among their children, but successful families engage in foundational processes that prepare heirs for parents’ inevitable aging and loss. Working with a neutral mediator in a confidential setting, these families engage in education and planning, anticipate and discuss possible conflicts, and institutionalize conflict resolution. These processes help families and their estate planning attorneys avoid or at least significantly reduce family discord, which in turn helps protect and preserve family unity and wealth. Estate planners have a unique opportunity to integrate estate planning mediation into the estate planning process and educate clients and their families about its benefits.

Prepare Heirs Using Confidential
Estate Planning Mediation

Estate planning family mediation is an appropriate estate planning foundation. This involves bringing all family members together with a mediator in a confidential setting. Mediation conducted by a neutral mediator serves a different purpose than family meetings conducted by the estate planning attorney. At least in California, mediation confidentiality is provided by statute, and mediation with a neutral mediator allows for confidential open discussion. Family meetings with the estate planning attorney are focused on reporting and are limited to topics that avoid breach of the attorney-client privilege. In mediation, the mediator is not competing with the estate planning attorney, attorney-client privilege is not at risk, and the result is a memorandum of understanding for the family and the estate planning attorney.

In this confidential setting, family members hear each other’s concerns and ideas, learn and discuss, e.g., what is required of a family fiduciary who will administer the trust/estate both during the lifetimes and after the deaths of the parents; who wants the position and who might best serve as fiduciary; how to avoid elder abuse and elder financial abuse; express thoughts about inheritance; allow all family members to participate in brainstorming ideas to meet their family needs. The approach is meant to provide a safe setting for family members to express concerns and ideas and work out their own solutions in light of the parents’ wishes. Involved family members are less likely to dispute what they had a hand in creating. Of course, the parents are free to plan their estates as they desire with the advice of their own estate planning attorney.

A signed memorandum of understanding is produced, reflecting the ideas and issues discussed, solutions proposed, agreements reached, and a statement whether or not, and to whom, the memorandum may be released. Confidentiality of this memorandum may be waived to be shared with the parents’ estate planning attorney, investment advisor, and other appropriate advisors, as a roadmap for estate and financial planning.

Participants may return to mediation to resolve new conflicts or matters that have changed since the initial mediation. Should a family member later raise issues with the attorney about the parents’ estate plan, the attorney will be able to refer the family member back to the memorandum of understanding in which they participated.

Both estate planners and their clients benefit from estate planning family mediation. Prepared heirs are less likely to create or sustain conflict within a family or against the estate planning attorney. Estate planners who reinforce estate planning family mediation with their clients reduce the chances for unresolved misunderstandings and disputes, and increase opportunities to protect family unity and wealth.

 

This article was originally published in estateplanning.com and can be seen here
http://www.estateplanning.com/How-to-Leave-Assets-to-Adult-Children/

 

 

Six Biggest IRA Beneficiary Form Mistakes

 

Americans hold nearly $15 Trillion in IRA’s and other qualified plans. If you have a retirement plan you have made a series of very wise deci­sions. Now you must take steps to protect and preserve what you have worked so hard for.

Do you want your heirs to have to chase after the IRA money? Better make sure you have an up to date beneficia­ry form. On January 26, 2009, the United States Supreme Court unanimously ruled in the case of Kennedy vs DuPont that the plan administrator was not required to honor the divorce decree. William and Liz Kennedy were married in 1971 while William was an employee of DuPont and a participant in its Savings and Investment Plan. William designated Liz as the sole beneficiary of his plan benefits. When William and Liz divorced in 1994, the divorce decree terminated any of her rights to William’s pension or retirement benefits. William never changed his beneficiary form. When William died in 2001, his estate demanded the plan funds based on the domestic relations order. The Du­Pont plan administrator refused and disbursed the funds to Liz, in reliance on William’s beneficiary designation form. The ex-wife, who was still listed on the beneficiary form, gets the money, even though the divorce court ordered her rights terminated and she signed a waiver.

It is important to understand that your will does not control who gets your IRA.

The Beneficiary Designation Form trumps your will. Filling out the Beneficiary designation form correctly is critical. In my practice I see clients who come in with sophisticated wills or trusts. When I ask about the IRA it is often the largest asset. When I ask what the Beneficiary Designation form says they look surprised. They have no idea what the form says. Many cannot even find the form or remember when they last reviewed it.

So what are the Biggest mistakes?

Mistake #1. You cannot find the form. The Supreme Court made it clear, the beneficiary form rules. Without the form you are stuck with the default provisions of the plan. You may not like the result. Frequently it goes to your es­tate. This is the last place you want it to go. Make sure you and your family can find the form. Do not assume that the plan administrator will be able to find it either. In this time of companies merging, going out of business, getting sold, or moving, files get lost or misplaced. Do you think that when all those files are getting moved that someone takes the time to say wait a minute these Beneficiary forms are very important! Not likely. Solution Get an acknowledged copy of your beneficiary form from the IRA administrator. Make sure that you keep the forms in a place that you and family can easily find. All of your planning goes out the window if the form cannot be found.

Mistake #2. The form is out of date. Have there been any changes in your life, such as marriage, birth of a child or grandchild, divorce, job change, retirement, a death? Remember that your will cannot change the beneficiary of your plan! It is imperative that you review the beneficiary form regularly. This is basic, but unfortunately many get it wrong. In 2001 The New York Post ran a headline declar­ing a “Pension Pickle!” after Anne Friedman’s $900,000 pension went not to her loving husband of nearly 20 years but to her sister, who refused to share her new found wealth. The beneficiary form Anne filled out in 1974 and never updated after she married was binding.

Another problem I have seen far too often is accidentally disinheriting a child’s family. You name your three chil­dren as beneficiaries, intending each child to receive 1/3rd. Your oldest child predeceases you. At the time of your death your two surviving children receive 50% each instead of the 1/3rd you intended. Your oldest child’s family gets nothing.

Solution. Review the form annually. Tax time is an ideal time since you are reviewing all of your financial records anyway.
Mistake #3. You have not named a backup benefi­ciary. If you do not name a backup beneficiary then who knows who gets the money. The Probate Court will most likely be in charge. Example: you name your spouse as the only beneficiary. If your spouse dies before you, there is no beneficiary so your IRA will be liquidated, taxed and what is left will be distributed to your estate. It is a good idea to name someone, say your children, as contingent beneficia­ries. If you name backup beneficiaries then the IRA has a chance of getting it where you want it to go.

A single person may name his parents first and then St Nor­bert College as the backup beneficiary. Naming a charity is a great planning idea but that is a topic for another day.

Mistake #4. Naming a minor as a beneficiary. A minor cannot control funds. Court appointed Guardians are in control. This will result in a trip to the Probate Court, and later, when the child turns 21 (18 in some states), to the Sports Car Dealership. The only question will be what color! Solution Set up a Trust so the funds are managed under your instructions, by people of your choice.

Mistake #5. Missing out on the Stretch IRA Op­portunity. The Stretch IRA can turn a modest IRA into millions for your beneficiary. The Stretch IRA is not some­thing that you can buy. Rather it is how you set up your beneficiary designation. Stretching the IRA payments over the lifetime of the beneficiary allows the IRA to grow tax deferred. Let’s do some calculations. We have a $100,000 IRA go to a 30 year old child. If the funds earn an aver­age of 7% over the life of the child which according to IRS tables is 53 years, the value would be $1,026,533. A $100,000 IRA has become a very significant asset. Naming an even younger grandchild can supercharge the result to over $2,000,000.

This is great but will it really happen? Probably not! Why? IRS statistics show us that 90% of IRA’s are cashed out within 6 months of death. This is called the “Found Mon­ey” syndrome. This new wealth is unexpected gain to be spent.

Solution Something needs to be put in place to make sure that the funds will be used over a lifetime. This is a trust. It has lots of different names. IRA Stretch Trust, Retire­ment Benefits Trust, Stand Alone IRA Trust just to name a few. Regardless of the name the purpose is to preserve the Stretch Opportunity.

Mistake #6. Not providing Creditor Protection for the Beneficiary. Would you like to protect your child’s inheritance from divorce, lawsuits, creditors, business failure, even bankruptcy grabbing the IRA? Some children suffer from poor money management skills and others have special needs. The divorce rate in this country is quite high. If your IRA is left to your child who later gets di­vorced who will end up with the funds? Would you like to protect assets and keep them in the family? Are you aware that you can do this? Solution In my office we build Castle Trusts. Historically why were Castle’s built? Protec­tion. We like to make sure that your loved ones have the Castle Trust protection. These are trusts that have special asset protection features built in to them that help preserve your wealth and safeguard your assets.

The Bottom Line

The difference between effective planning and getting it wrong can cost your family millions of dollars. Done cor­rectly your retirement plan can preserve some significant funds for future generations to enjoy. Wouldn’t it be great if everything always worked out the way you planned? In a perfect world it does. But I am sure you are aware ours is a world full of surprises where Murphy’s Rule often jumps up to bite you. The rules surrounding retirement plans are complicated enough, don’t compound the difficulty by messing up the beneficiary forms. When a good portion of your assets consist of a retirement plan you need expert help.

Important: The information in this article is for general in­formation purposes only and is not, nor is it intended to be, legal advice, including legal advice for Internal Revenue Code purposes as described in IRS Circular 230. Tax law changes frequently, so please consult your financial advisor.

 

This article was orignally posted in estateplanning.com you can view it here

http://www.estateplanning.com/Six-Biggest-IRA-Beneficiary-Form-Mistakes/

How to Leave Assets to Adult Children

When considering how to leave assets to your adult children, first decide how much you want each one to receive. Most parents want to treat their children fairly, but this doesn’t necessarily mean they should receive equal shares of your estate. For example, you may want to give more to a child who is a teacher than to one who has a successful business. Or you may want to compensate a child who has taken care of you during an illness or your later years.

Some parents worry about leaving too much money to their children. They want their children to have enough to do whatever they wish, but not so much that they will be lazy and unproductive. Well, no one said you have to give everything to your children. You may prefer to leave more to your grandchildren and future generations through a trust, and/or make a generous charitable contribution.

Next, decide how you want your children to receive their inheritances. You have several options from which to choose.

Option 1: Give Some Now
If you can afford to give your children or grandchildren some of their inheritance now, you will experience the joy of seeing the results. You could help a child buy a house, start a business, be a stay-at-home parent to your grandchildren, or even see your grandchildren go to college—and know that it may not have happened without your help. This would also let you see how each child might handle a larger inheritance.

Option 2: Lump Sum
If your children are responsible adults, this may seem like a good choice—especially if they are older and you are concerned that they may not have many years left to enjoy the inheritance. However, once a beneficiary has possession of the assets, he or she could lose them to creditors, a lawsuit, or a divorce settlement. Even a current spouse can have access to assets that are placed in a joint account or if your child adds his/her spouse as a co-owner. If it bothers you that a son-or daughter-in law could end up with your assets, or that a creditor could seize them, or that a child might spend irresponsibly, a lump sum distribution may not be the right choice.

Option 3: Installments
Many parents like to give their children more than one opportunity to invest or use the inheritance wisely, which doesn’t always happen the first time around. Installments can be made at certain intervals (say, one-third upon your death, one-third five years later, and the final third five years after that) or at certain ages (say, age 25, age 30 and age 35). In either case, be sure to review your instructions from time to time and make changes as needed. For example, if you live a very long time, your children might not live long enough to receive the full inheritance—or, they may have passed the distribution ages and, by default, receive the entire inheritance in a lump sum.

Option 4: Keep Assets in a Trust
You can keep your assets in a trust and provide for your children, but not actually give the assets to them. Assets that remain in a trust are protected from a beneficiary’s creditors, lawsuits, irresponsible spending, and ex- and current spouses. If you have a special needs dependent, or if a child should become incapacitated, the trust can provide for this child without jeopardizing valuable government benefits. If you have a child who might need some incentive to earn a living, you can match the income he/she earns. (Be sure to allow for the possibility that this child might become unable to work or retires.) If you have a child who is financially secure, you can keep the assets in trust for your grandchildren and future generations, and still provide a safety net if this child’s situation changes and he/she needs financial help. This option gives you the most flexibility, control and protection over the assets you worked a lifetime to accumulate and build.

While there is no one right choice for how to leave assets to all adult children, given many individuals’ concerns over protecting inheritances from creditors (particularly ex son or daughters in law), many choose leaving their assets in trust for the benefit of their children and/or grandchildren. Regardless of your ultimate choice, this is an important decision that should be considered with input from your estate planning professional.

An Estate Plan For Cinderella's Parents

 

I saw Cinderella for the first time with my daughter recently, and though I (and likely you) were familiar with the outline of the story, we often forget the backstory. It starts with the disaster, specifically, an estate planning disaster in a world that does not need to worry about the estate tax or probate, or even lawyers.

You see, Cinderella’s mother died when she was a child. Her father decided to remarry a woman with two girls that are about the age of his own daughter. Cinderella’s father dies next, when she is still a child. He leaves the estate to his widow (the normal thing to do in the real world), who serves as Cinderella’s stepmother. This woman takes control of the estate for the benefit of herself and her own two daughters. Cinderella then, as presumably everybody who is reading this knows, is treated as a servant in her own home by the infamous wicked stepmother. Cinderella is now reduced to befriending rodents and birds with dressmaking skills.

What is interesting about the Cinderella backstory is how common it is. It is a theme that exists throughout all of human civilization and in stories from ancient times. Rhodopis is essentially the name of Cinderella in ancient Greece. There are many other versions of the story told throughout history around the globe. It is also well known that men are very likely to remarry when they become widowers, a social phenomenon that has been noted and studied for years.

The theme of subjugation of a child (in Cinderella’s case, being a presumably unpaid servant) using the orphan’s own assets is based on the inherent structural problems of asset succession, much of which cannot be addressed through legislation. The old manage the money of the young. This is often what leads to a version of the oppression experienced by fictional Cinderella. Of course, societies have attempted to remedy these concerns by regulating individuals and institutions known as “fiduciaries.” Minors are often represented in court by a “guardian ad litem.” Judges in probate court often presume to protect the interests of minors in what seems to many as a paternalistic system. Indeed, in some jurisdictions, probate court is known as “orphan’s court.”

The structural problems, however, can never really go away. For the most part, societies developed remedies that may be imposed when it is already too late. The presence of laws by itself will not completely stop men (or wicked stepmothers) from taking advantage of wealth when the opportunity presents itself.

Every year in virtually every jurisdiction in the United States with a sizable population there are cases involving breach of trust or similar claims relating to estates. The cost of such disputes could easily surpass the cost of probating a last will and testament or paying an estate tax to the federal government, if there was one.

The good news for people litigating with a competent attorney is that they actually have some sort of a claim that they can make to a court. Much of the time, affairs are structured so poorly that there is nothing anybody can do about the resulting injustice. It is common for spouses to own their property jointly, even widowers who remarry. Married couples like to name each other as beneficiaries in their retirement plans and life insurance, and they like to structure ownership of their homes in such a way that all of the property passes to the surviving spouse through the deed (joint tenancy with right of survivorship for example). They do the same with their financial accounts and everything else that they own. There is no probate, no trust administration, and no notice to anybody. The surviving spouse just gets everything. Often, even when there is a trust or a will, the spouse gets everything in a way that makes the Cinderella problem no less likely. Now in the era of portability and a high estate tax exemption where the vast majority of the U.S. population will never have to worry about the estate tax, this type of “estate planning” may threaten to become the norm.

Married couples often plan for their own convenience. When people plan their estates, they often think about their own mortality but not the consequences of the mortality of others and the results that may come from other unfortunate occurrences. Most have little to do with the government.

In the non-Disney world, wicked stepmothers are everywhere. We call them bankruptcy trustees, judgment creditors and yes, actual wicked stepmothers. The stories of modern-day Cinderellas are remade and retold every day throughout the country. The wicked stepmothers are often real brothers and sisters, uncles and aunts, people will assume the title of “trustee” or simply hold assets that should belong to others but have been usurped.

The parents of modern-day Cinderellas were not bad people in life; they often failed to properly plan. They certainly did not wish ill for their children. Though ill they wrought by not planning for things common in the human experience. An attorney and client, often with other advisors, collaboratively develop solutions for issues such as creditor protection, remarriage protection, guardianship and special needs. This type of planning requires attorneys as counselors. State legislatures and the Federal Government cannot write laws to protect families they have never met.

Litigation attorneys in the trust and estates world are not Fairy Godmothers. They may be helpful in fighting injustice and helping resolve the agony that occurs when there is a cause of action, something a lawyer can file in court in the first place. Unlike fictional Fairy Godmothers, litigation attorneys are paid. Litigation itself is not only expensive, but burdensome and difficult in a myriad of other ways. There is no guarantee that good estate planning will eliminate the risk of litigation, though all good estate plans certainly plan for risks that are known. Some risks have been known for thousands of years.

Fairy tales may end well because of magical fairies and rodents, but like Cinderella, they start with avoidable tragedy common to the human experience in a world without talking mice. A good estate planning attorney will help families avoid what could be avoided.

This article was original posted in estateplannin.com and can be seen here http://www.estateplanning.com/An-Estate-Plan-for-Cinderellas-Parents/

How to Leave Assets to Minor Children

Every parent wants to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles and other relatives often want to leave some of their assets to young children, too. But good intentions and poor planning often have unintended results.

For example, many parents think if they name a guardian for their minor children in their wills and something happens to them, the named person will automatically be able to use the inheritance to take care of the children. But that’s not what happens. When the will is probated, the court will appoint a guardian to raise the child; usually this is the person named by the parents. But the court, not the guardian, will control the inheritance until the child reaches legal age (18 or 21). At that time, the child will receive the entire inheritance. Most parents would prefer that their children inherit at a later age, but with a simple will, you have no choice; once the child attains the age of majority the court must distribute the entire inheritance in one lump sum.

A court guardianship for a minor child is very similar to one for an incompetent adult. Things move slowly and can become very expensive. Every expense must be documented, audited and approved by the court, and an attorney will need to represent the child. All of these expenses are paid from the inheritance, and because the court must do its best to treat everyone equally under the law, it is difficult to make exceptions for each child’s unique needs.

Quite often children inherit money, real estate, stocks, CDs and other investments from grandparents and other relatives. If the child is still a minor when this person dies, the court will usually get involved, especially if the inheritance is significant. That’s because minor children can be on a title, but they cannot conduct business in their own names. So as soon as the owner’s signature is required to sell, refinance or transact other business, the court will have to get involved to protect the child’s interests.

Sometimes a custodial account is established for a minor child under the Uniform Transfer to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). These are usually established through a bank and a custodian is named to manage the funds. But if the amount is significant (say, $10,000 or more), court approval may be required. In any event, the child will still receive the full amount at legal age.

A better option is to set up a children’s trust in your will and name someone to manage the inheritance instead of the court. You can also decide when the children will inherit. But the trust cannot be funded until the will has been probated, and that can take precious time and could reduce the assets. If you become incapacitated, this trust does not go into effect…because a will cannot go into effect until after you die.

Another option is a revocable living trust, the preferred option for many parents and grandparents. The person(s) you select, not the court, will be able to manage the inheritance for your minor children or grandchildren until they reach the age(s) you want them to inherit—even if you become incapacitated. Each child’s needs and circumstances can be accommodated, just as you would do. And assets that remain in the trust are protected from the courts, irresponsible spending and creditors (even divorce proceedings).