Estate Planning Tips for Fort Wayne-Area Residents

Estate planning often proves a confusing subject for many Fort Wayne people – or residents of any city, for that matter. We seek here to sweep away the confusion. And a wise way to begin is by defining specific terms. Recognizing essential estate planning terminology can help clarify which estate planning documents are required to address an individual’s estate planning needs.

First off, a person who drafts a will is called a “testator.” The specifications of the testator’s go into effect immediately after he or she has died. To be clear, the will spells out for the testator’s personal representative, or executor, the manner in which the testator’s assets must be distributed.

Another oft-employed estate planning document is a revocable trust, or a “living” trust. The person who creates it is referred to as a “settlor.” A revocable trust is a separate legal entity that applies during the settlor’s life and becomes law immediately as it’s executed. The trust is initiated to specify who owns and manages the settlor’s assets, and asset management is executed by the person appointed as trustee. Once the settlor moves his or her assets into a revocable trust, the settlor no longer owns them. Regardless, the settlor can, if desired, serve as the trustee of his or her own trust. The trust is drawn up with complex administrative provisions telling the trustee how to manage the assets while they‘re in the trust.

A reason frequently produced for transferring assets to a revocable trust is to sidestep probate. Probate is a court proceeding in which a will is filed with a court in order to allocate someone’s assets upon his or her death. The process can be time consuming since it involves court oversight and extensive attorney participation. Even so, in a lot of states a less complicated process has been authorized that enables a testator’s personal representative or executor to allocate estate assets minus court supervision. This cuts the number of court appearances and filings deemed necessary by the executor’s attorney, which in turn drastically lessens the time and cost devoted to administering a probate estate.

As revocable trusts are normally quite detailed legal documents, they can present disadvantages significantly more troublesome than probate administration. Consider, for instance, that it sets people back further financially to create revocable trusts than normal wills. After a revocable trust has been set up, the individual is required to move his or her assets into the trust so as to make the trust effective. Appropriate transfers require legal assistance such as preparation of deeds and bills of sale. A person may wind up paying more for the preparation of the revocable trust and the following transfer of assets than his or her estate will ultimately pay for the complete probate process.

The point isn’t, however, that revocable trusts should never be considered a good idea. There are a number of situations where an estate planning attorney might encourage an individual to set up a revocable trust. Some typical scenarios in which a trust may be advisable are when a client wishes for privacy, or needs more flexibility to provide for second marriages and step-children, or owns real estate in another state. The bottom line is this: everyone’s estate planning needs are like no others’. You really ought to meet with your Fort Wayne estate planning attorney and go over your wishes and assets fully. Estate planning, when done properly, should always lessen confusion and bring you peace of mind.