Most people know that creating a Last Will and Testament is the foundation of any estate plan and, therefore, make a point of executing a Will. Updating your Will, however, after a major life change can be as important as executing the Will in the first place. Although each person’s situation is different, and there are certainly other reasons that may also warrant an update, there are three major life changes that should prompt anyone to update a Will and any additional supporting estate planning documents.

A divorce is always a good reason to update your Will. The majority of people create reciprocal Wills, meaning that if one spouse dies, all assets go to the other spouse and vice versa. If you get a divorce, and subsequently die without having updated your Will, your current wishes for the distributions of your estate may not be followed.

Marriage, likewise, calls for a Will update for the opposite reason. Although some states allow a spouse to “take against a Will” whether or not the Will actually names the spouse as a beneficiary, state law in the state where you are a resident at the time of death may not provide this option. Even if it does, it may not give your spouse as much of your estate as you intended him or her to have.

The birth of a child or grandchild is also a good time to update your Will. Many people rely on the generic term “issue” to refer to children or grandchildren in a Will; however, this can present a problem if a child or grandchild was born out of wedlock or there is some other question as to paternity. By naming the children or grandchildren in the Will, you avoid any potential problems.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

When you sit down with your estate planning attorney to plan your estate, a rudimentary understanding of common wills and trust terminology may make you feel more comfortable. For example, the terms “beneficiary” and “heir” are often used interchangeably; however, in most states they have very different meanings.

State laws determine rules, procedures, and terminology with regard to estate matters; however, there are some fairly universal concepts and terms. An heir is typically someone who will stand to inherit from your estate under the laws of intestate succession. Intestate succession, in turn, simply refers to an estate wherein the decedent died without leaving a valid Last Will and Testament. As a general rule, heirs under intestate succession laws include a spouse and other blood relatives. Your spouse and children will likely be the first heirs in line to inherit, followed by grandchildren, parents, siblings, and on down the line until your entire estate has been accounted for under your state’s intestate succession laws.

A beneficiary, on the other hand, is someone that you specifically mention as receiving a gift under the terms of your will. For example, if you bequeath your father’s ring to your daughter in your will, she is then a beneficiary under the terms of your will. Likewise, if you bequeath your vehicle to your best friend Sally under the terms of your will, Sally is a beneficiary. A person can be both an heir and a beneficiary. In the above examples, your daughter is both an heir and a beneficiary; however, Sally is only a beneficiary.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Understanding the concept of intestate succession can certainly be important if you are planning your own estate; however, you may also find it helpful in the event that a relative dies without leaving a will behind. Wills, trusts and estates fall under the jurisdiction of state laws.  Each state determines what laws, rules, and procedures apply to wills, trusts, and estates. Intestate succession, however, is a fairly universal concept that applies, in some form, to all the states.

When a person dies, and does not leave behind a valid Last Will and Testament, the person is said to have died “intestate.” When that happens, the state intestate succession laws govern how the assets that make up the decedent’s estate will be handled and who will receive them. Another scenario under which the laws of intestate succession apply is when a will was executed, but the will failed to account for all the estate assets. For example, if the decedent left a will with a number of specific bequests, yet did not indicate who would receive any cash or assets that are not specifically mentioned in the will.

State law determines who inherits when a decedent dies intestate and how the estate assets are apportioned among the heirs. In most states, the spouse and children are first in line to inherit, followed by lineal descendants such as grandchildren and/or parents, siblings, and other blood relatives.

Before assets in an intestate estate can be transferred to heirs, a court must determine who the heirs are to the estate.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Imagine that you spent a lifetime creating an estate that is worth a considerable amount of money at the time of your death. Like many people, you probably devised an estate plan that allowed you to pass those assets down to loved ones and family members upon your death. You may even have been concerned about a particular beneficiary’s ability to handle money or their age at the time and therefore created a trust in order to better control the assets left to him or her. How would you feel if you knew that the beneficiary managed to rack up a substantial amount of debt that went unpaid and that the creditors then attached the trust assets in order to satisfy the debt? This can happen unless you plan ahead by creating a spendthrift trust.

A spendthrift trust operates in much the same way as any other trust. At its core, it is created and administered in the same way as all trusts; however, it includes a specific provision that prevents a beneficiary from assigning his or her interests to a third party as well as preventing a third party from claiming any interest in the assets as a result of debts owed by the beneficiary. Not all states recognize spendthrift trusts, but most do in one form or another. Because trusts are governed by state law, the precise language needed to create a spendthrift trust will vary by state. The goal, however, of a spendthrift trust is the same in all states. By creating a spendthrift trust, you can be certain that your assets will not fall into the hands of a third party due to the poor money management of a beneficiary.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Many people mistakenly believe that only people with significant assets really have a reason to create a Last Will and Testament. Wills are not only for the rich and famous though. In reality, there are numerous reasons why the average person should execute a will.

If you have minor children, for example, you need a will. If you die, leaving minor children who survive you, a court will generally award custody of the children to the other biological parent. What if you both die simultaneously though? Although this type of tragedy is unlikely to happen, it does occur sometimes. Or what if the other parent is no longer living when you die or has no relationship at all with your children? In those cases, a court will have to make a determination regarding custody of your minor children. Appointing a guardian in your will is the only chance you have to express your desires ahead of time in the event a court must make a decision after your death. State laws differ with regard to how a court looks at the appointment of a guardian in a will, but in all cases the appointment will be given significant weight when the court makes a decision.

Along with appointing a guardian, a will allows you to make specific bequests to important people in your life. If, for example, you have family heirlooms that you wish to pass down to specific people, you may do so through specific bequests in a will. Discussing who you want to have which assets in the event of your death is fine; however, no one is under any legal obligation to honor your wishes once you are gone unless you have expressed those wishes in a Last Will and Testament.

Finally, if you are in a long-term relationship, but not legally married, your significant other will not be entitled to anything upon your death in the absence of a will. If you wish to leave any assets to your partner, or even leave him or her a special item of significance for you two, the only way to accomplish this is through executing a will.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Don’t miss “Estate Planning Made Easy” next week on Dec 7 at 6:30p at SW Community Center for free! www.rbsllc.com

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

When people begin planning for retirement or end-of-life situations, they sometimes create a trust. A trust is a type of legal entity that can own property just like a person can. When you create a trust you transfer some or all of your property to it that is known as “settling” the trust. You then appoint someone, known as a trustee, to manage the trust property and name someone else, known as a beneficiary, who receives the right to use the property or benefit from it.

There are two main kinds of trusts: a living trust and a testamentary trust. A living trust, also known as an inter-vivos trust, is a trust you establish during your lifetime. A testamentary trust is one you establish by creating a last will and testament that provides for the creation of the trust. A will only takes effect after you die, so when you provide for the creation of a trust in your will, that trust is only created after your death.

Living trusts can further be divided into two groups: revocable and irrevocable. A revocable trust is one that you can change during its lifetime. You can, for example, dissolve the revocable trust and take possession of the property at any time, or modify the trust terms as you see fit. An irrevocable trust is just the opposite. Though you create the irrevocable trust, once it’s set up and operational you generally cannot dissolve it.

There are many other types of trusts as well.  Determining what type of trust is best for your situation and how best to go about creating one often requires the advice of a qualified estate planning attorney.

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Join attorney and author Richard B. Schneider at SW Community Center’s free class “Estate Planning Made Easy” on Dec 7 from 6:30-8p. www.rbsllc.com

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

What happens if you don’t do it?  Author Richard B. Schneider conducts a free workshop at 10:30a. for Gladstone Senior Center, “Estate Planning Essentials For Everyone” www.rbsllc.com

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.

Alleviate anxiety by planning ahead.  Attend Gladstone Senior Center’s “Estate Planning Essentials For Everyone” tomorrow on Nov 15 from 10:30a-12p. www.rbsllc.com

The Law Offices of Richard B. Schneider, LLC is a member of the American Academy of Estate Planning Attorneys.