Posts by Donald Rolfe

All posts by Donald Rolfe

How To Leave Money To Minors

As parents we all worry in the back of our heads about our children being cared for after we are gone. Hopefully we all get to see our children grow into adulthood and never have to worry about guardians and leaving money to minor children. As the saying goes, "hope for the best, plan for the worst."

Minors Cannot Directly Inherit Money & Assets

In most states a person under the age of 18 cannot directly inherit money & property and be in control of it. Rather, the laws require that a third party be appointed to manage and care for the minor's assets. 

This third party can be a custodian or a trustee depending on the type of Estate Plan involved. 

In the event you have a Will based Estate Plan, or no Estate Plan at all, the third party will mostly likely be referred to as a custodian. You can name a custodian in your Will. If you have no Will a judge will appoint a custodian. In either case, the custodian must be approved and appointed by a judge.

In the event that you have a Trust based Estate Plan, you can leave your children's inheritance to them in a Trust and select the Trustee for that Trust. Absent some unforeseen turn of events, there is no need for a judge to get involved. 

Also, the people you choose as guardians for your children can, and often should, be different than the person you name as Trustee or Custodian. That way your children can have the best of both world after losing everything; the right people raising them and the right people looking after their inheritance. 

If you'd like to learn more about leaving money and property to minors, please schedule and complimentary Strategy Session with me

Why You Need A Will With Your Trust

A couple that I worked with this year was surprised to learn that they need a Will to go along with their Trust based Estate Plan.

This couple came to me with a Will based Estate Plan that they had for years. These was nothing wrong with their plan when it was setup. However, as time passes, circumstances change as to your Estate Planning needs.

After learning about their current circumstances, we all agreed that a Trust based Estate Plan was right for them.

When they came in for their signing cermony, we reviewed their Trust and other documents. The couple was surprised that switching form a Will based to Trust based Estate Plan would require them to still have Will.

There Are Two Main Reasons You Need a Will With Your Trust

REASON #1 - You pass away before your Trust is fully funded. 

This can happed if you pass away before you have time to fund your Trust, or if there is a mistake/oversight and an asset is properly funded into your Trust.

In this case, your Pour-Over Will directs that you are leaving your probate assets (those not funded into your Trust) to your Trust. Once the Probate is complete, all of your assets are then handled pursuant to the terms of your Trust.

REASON #2 - Your Trust is invalid for some reason.

It doesn't happen often, but there is always a change that your Trust can be found to be invalid. 

It could be an error in executing your Trust, or due to an heir challenging your Trust in Court.

No matter the reason, if your Trust is invalid that you assets will need to go through Probate. In this case, your Pour-Over Will directs your Personal Representative to setup a new Trust with the same goals, heirs and wishes as your invalid Trust. Then all of your assets are left to the new Trust and your assets will go where you wanted them to go in the first place.

Hopefully Your Pour-Over Will Never Gets Used.

As you've heard me say in the past, a goal of having a Trust is to avoid Probate. That means that our goal is to never use your Pour-Over Will.

Despite our goal, we never want to put all of our eggs in one basket and having the Pour-Over Will is an insurance policy for your Estate Plan.

If you have any questions, or want to learn more about Estate Planning, please schedule a complimentary Estate Planning Strategy Session.

How To Leave Real Property To More Than One Person

Just last week I met with a client with three children. They wanted to leave the home they had built to all three of their children. 

This can, and often is a bad idea. When you leave a single piece of real property to more than one person, conflicts can often arises. Most likely they will take ownership as tenants in common...meaning that each of them owns a undivided interest in the whole property. 

The conflict comes in determining how the real property will be used. Who gets to live there? Who pays the property taxes? How much is reasonable to pay the owner managing the property. 

I often advise my clients to choose one person to inherit the each piece of real property and offset the value of the real property with other assets to other beneficiaries. 

If it is a must that the property must stay in the family, there are solutions to set down rules for the use and enjoyment of real property. Those solutions are often expensive. If its important that to you that you leave real property to more than one person, then the expense is well worth it.

If you have any questions about leaving real property to your heirs, or any other estate planning questions, schedule a complimentary estate planning strategy session.

How Do You Avoid Probate

Estate Planning Weekly - Episode 2

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"How do I avoid probate?" "Why should I avoid probate?"

I get asked questions like this all the time. Many people have heard that avoiding probate is a good thing, but they aren't sure how and why.

The how is relatively easy...create a Trust based estate plan. By having a properly funded trust, your esate will not require a probate. 

The why is varies from person to person. Some the most common and compelling reasons are:

  • A trust keeps everything private. If your estate requires a probate, everything filed with the court is a public record.
  • There is rarely need for court involvement during the administration of a trust. This simplifies the process by not having to make court filings and making sure that you are meeting all of the court's requirements.
  • Cost. While not exorbitant, there are filing fees to open and close a probate. Further, due to the number of notice and filing required a probate usually requires more attorney hours.

So now that you know the why and how of avoiding probate the next step is to get your estate plan started. 

If you'd like to find out what plan is right for you, or you have any estate plan related questions, schedule a complimentary estate plan Strategy Session

What’s The Difference Between a Will and a Trust

Estate Planning Weekly - Episode 1

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One of the most common questions I get about estate planning is "What's the difference between a Trust and a Will?"

Trusts and Wills are documents that you create during your life that direct who your assets go to after you pass away. The main difference is that a Trust works during you life and a Will only works after you've passed away, its submitted to probate, and the probate court accepts it.

Trusts have the advantage of allowing your successor trustee to step in and manage your affairs if you become incapacitated. A properly drafted, executed, and funded Trust allows a seamless transition without the involvement of a court or the need for other documents.

Another advantage of Trusts is that they are private. Wills on the other hand become public once they are filed with the court.

In Oregon, the main advantage of a Will is the ability to name guardians for your minor children. You can also accomplish this with a Trust based estate plan by also having a Will that names those guardians and leaves the distribution of your assets to the Trust.

Most people I work with go the Trust route. However, it depends on your specific circumstance whether a Trust or Will estate plan is right for you.

If you'd like to find out what plan is right for you, or you have any estate plan related questions, schedule a complimentary estate plan Strategy Session.

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