FAQ Friday: Levels of Planning Part 3
On Friday, May 27th, at 11am EST, Mr. Berger describes the levels of estate planning for a married couple with adult children.
The minimum level includes Wills. We call this the I love you will where everything is left outright. Joint ownership on all assets. On first death, the spouse would get everything. There isn’t any asset protection, but probate is very minimal. On the second death-the house, cars and bank accounts without listed beneficiaries would have to go through probate. This gives the ultimate control to the surviving spouse.
The second level is a revocable living Trust. This gives everything to the survivor’s trust upon the first death. We will lead you through the process and make sure the beneficiary designations are completed. There isn’t any asset protection or re-marriage protection. On the second death, the property is distributed without probate.
Third level of planning is a joint revocable trust that splits in half upon the first death. Half goes to the family trust. The other half goes to an irrevocable family trust. Assets in this trust are protected against creditors. If the survivor gets remarried, beneficiaries cannot be changed. One of the disadvantages is it is a separate entity, so children will need to file a tax return annually. There is only probate on assets not originally put in the Trust.
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