ORGANIZING YOUR IMPORTANT PAPERS
Having the proper estate planning documents gives you confidence that you have provided for your loved ones into the future, protects your loved ones from making difficult decisions, prevents disputes and uncertainty, and saves your estate money. Once you have these documents, however, you can provide for the future and protect your loved ones further by being organized about your affairs. Here are my recommendations:
As I Get Older, Should I Transfer Assets to My Children?
At Powers & French, we often have elderly clients who ask whether they should start transferring their assets to their adult children in order to avoid estate taxation or having to use all of their savings to finance long term care. Our answer is usually a resounding “No”. While legal advice differs widely depending on individual circumstances, here are some reasons why elders should think twice before giving away their assets:
New Financial Powers of Attorney Law
Maine has a new law governing financial powers of attorney: the Uniform Power of Attorney Act, which became effective July 2010. The new law is meant in particular to both provide more guidance to agents and to offer more protections from financial abuse perpetuated by misuse of powers of attorney (POAs).
Do I Need a Trust?
A trust is a legal agreement about how property is to be owned, managed and distributed by a named trustee. Trusts are flexible instruments and address a wide variety of situations. Trusts can be revocable (changed or terminated while you are alive) or irrevocable (not subject to change, usually for tax or asset protection purposes.) Trusts formed by wills are irrevocable upon death.
Do I Need a Will?
The best way to decide is to understand what happens if you die without a will (intestate). Intestate estates must file a formal actions in probate court. If the estate assets are under $20,000 with no real estate and only one heir, it can be a quick process. Otherwise, an estate executor must be appointed by the court; if there is disagreement about who should be appointed, the court holds a hearing. The court also holds a hearing to determine intestacy and how assets should be distributed. Intestacy law distributes assets between spouses and children, spouses and parents, or siblings, depending on who survives. Probate fees are based estate assets and range from $100 for a small estate to $800 for a $1 million estate. Formal probate can take a year or more.