WILL

If you would like to formalize how you would like your assets distributed after your death, you will need a will. You will also want to take advantage of the many ways to reduce expenses and taxes and thus avoid unnecessary shrinkage of the estate. In addition, you will select an individual as the executor who will be entrusted with settling your estate and carrying out the particular distribution called for in the will. When there is no will, the law establishes how a person's estate will be distributed, and the distribution imposed by law cannot and does not take into account the individual's particular desires or the special circumstances which may exist in his or her family. The court will also appoint someone to administer the estate and it may not be the person you would choose. In Connecticut, anyone who is at least eighteen years old and of sound mind can make a will. Because it is such an important document, certain formalities must be observed in the preparation and signing of a valid will in order to give it any effect. I have the training and experience needed to advise clients on the subject, to make sure that each client's objectives are taken into account, in the context of his or her family. It will remain in effect until you revoke it, or an event occurs in your life that should be reflected in a new will, or it does not meet your needs anymore (a subsequent marriage, divorce or dissolution of marriage, birth or adoption of a minor child will revoke a will unless a provision is made to cover such an occurrence). A carefully drawn will can often result in tax savings and may also result in a reduction of administration expenses.

ESTATE PLANNING

LIVING TRUST - There are two types of living trusts. A revocable living trust is a trust set up by an individual during his or her lifetime and operates during the person's lifetime. It can continue after the person's death for the benefit of a spouse, children, other relatives, friends or charitable organizations. The individual is completely at liberty to change or cancel (revoke) the trust at any time. It may also be used to save estate taxes in a manner similar to a will. Also, a living trust may provide confidentiality and privacy as it usually does not have to be filed in the probate court nor are the assets usually disclosed. An irrevocable living trust is the second type and is not subject to change or cancellation. This will have better tax consequences but you will be unable to change any of the terms or appointments once executed. This does not allow you a lot of mobility in the event you change your mind.

It is always a good idea to have at least a simple will even if there is a living trust. Remember, the trust can dispose of only those assets that are properly transferred to it. Very often, by design, oversight, or lack of attention, not every asset is placed in the trust, thus necessitating probate for any assets not in the trust. The will may state that all probate assets are to be transferred to the trust or may contain other dispositive provisions. A living trust does not avoid probate entirely, however. Title to the assets transferred into a living trust are held in the name of the trustee and not in the settlor's individual name. Thus, to the extent property is properly placed in the trust before death, the living trust “bypasses” probate in the sense that probate proceedings are not necessary to pass title to the trust assets on death. To accomplish this result one must be vigilant in placing and keeping assets in the trust. If this is accomplished, the use and enjoyment of the assets does pass on to the beneficiaries after the settlor's death; however, the Connecticut Succession Tax Return must be filed through the probate court (the succession tax is currently being phased out).

A revocable living trust does not in and of itself save taxes. The settlor reserves such rights over the trust and its property so that income and inheritance taxes are determined as if the trust did not exist. Furthermore, probate fees are not necessarily avoided. The trust can be drafted in a number of ways to save estate taxes, but such tax savings can also be achieved through the use of a testamentary trust.

LIVING WILL AND HEALTH CARE PROXY

A living will is a document dealing with whether or not and individual desires artificial life support systems under certain circumstances, i.e. terminal illness or permanent unconsciousness.

A Health Care Proxy elects a family member or physician to make medical decisions in the event you are unable to make these decisions or to make decisions regarding your body in the event you pass away.