Will and Trusts Legal Information

OVERVIEW

Wills and trusts lawyers are experts in how families pass money and legal power between generations and individuals. They help older people and their families write wills; set up financial trusts to benefit younger family members; handle end-of-life matters such as a living will and power of attorney; and limit or avoid the negative tax consequences of these decisions.

Wills and trusts lawyers may also be called probate lawyers or estate planners. Like many types of lawyers, they have legal subspecialties. Some wills and trusts lawyers specialize in estate planning and taxes; others specialize in situations where family members challenge or contest a will. When you go looking for a wills and trusts lawyer, you should look for one who specializes in your particular problem.

 

“DO I NEED A LAWYER TO WRITE MY WILL?”

First, it’s important to know what is and isn’t covered by a will. A will is a legal document in which you can specify who inherits your property after you die, who will care for any minor children you have and who will make sure it all gets done. It affects all property that’s in your name, which means that some of your property probably can’t be covered by a will. This can include:

  • Retirement income plans.
  • Life insurance.
  • Anything held jointly or “pay on death.”
  • Community property with a spouse.
  • Living trusts.

In most states, if you die without any will at all, your property will go to your spouse, or to your children, parents, siblings or grandchildren. In states with domestic partnerships available, domestic partners often have the same inheritance rights that spouses do.

For short, simple wills, you may not need a lawyer. Most states provide a simple form for you to fill out or allow you to write your own will. You can also find some legal document services that will provide the form and instructions for a small fee. However, if you believe there will be disputes over your will, expect to be subject to the estate tax, or have a complicated financial situation, you might be better off with a lawyer’s help.


“WHEN SHOULD I CONSIDER SOMETHING MORE THAN A WILL?”

The main reason to consider going beyond a will is to avoid probate proceedings. In probate, a court oversees the execution of a will and the distribution of any property not included in the will. Even if it’s uncontested, it takes time and will cost the heirs some money. Contested wills are rare, but can be much more expensive.

People who want to avoid probate generally set up living trusts, legal structures that function much like wills. You set up the structure of a trust, then transfer in all of your assets and name yourself as the person in charge while you live. The trust passes to someone you specify after you die, and that person is responsible for carrying out your wishes. This allows your heirs to avoid probate fees and transfers your assets more quickly and smoothly than you could otherwise expect.

 

“WHAT IS ESTATE PLANNING?”

Estate planning is the process by which you specify how all of your property and assets -- not just those affected by your will -- will be distributed after your death. It isn’t just for the rich; it’s for anyone who wants more control over their end-of-life choices than a will allows. Estate planning encompasses several services, including:

  • Setting up a living trust, a financial structure that allows you to avoid probate proceedings.
  • Giving money to your heirs now, or when they’re old enough to handle it.
  • Setting up power of attorney and a living will or health care proxy in case you’re too sick to make your own decisions.
  • Making decisions that can help your heirs avoid high taxes after your death.

An estate planning lawyer is especially important when you’re concerned about tax consequences. The tax code is very complicated, and many people don’t realize how it may apply to them. If you think your heirs might be hit by a big tax bill after you die, or you know they will and you want to avoid it, you should seriously consider consulting an estate planning lawyer for help. Estate planning lawyers know what actions have the most negative tax consequences and the best ways to avoid those consequences.

 

“WHAT CAN I DO TO GIVE MONEY TO MY HEIRS WHILE I LIVE?”

You can just write a check to your heirs, of course -- but there are many situations in which that’s not the best choice. You may want to give money to your heirs for college or as an investment. The heirs may be too young to handle the money, or you may want to make the gift contingent on certain behaviors. And of course, gifts are subject to taxation. In fact, gifts of more than $12,000 in one year may be taxed at rates as high as 46 percent.

Wills and trusts lawyers can help you set up a trust for your heirs, for now and the future. They can structure them to pay out regularly, in a lump sum or only after specified conditions are met. They can also help you with direct gifts, wills, joint ownership, college savings accounts and family business matters. And of course, they can help you minimize the taxation those gifts will receive.


“CAN A LAWYER MAKE SURE MY FAMILY RESPECTS MY HEALTH CARE WISHES?”

It’s not just possible, but smart, to protect yourself in case you become too sick to make your own decisions. Wills and trusts lawyers can usually help with:

A living will, also known as an advance medical directive. This document specifies your health care wishes in case you’re very ill and can’t communicate your own decisions. In addition to giving directions, you can specify under what conditions the living will takes effect and name a health care proxy, a person who makes sure your wishes are carried out. In some cases, state laws will override your living will, but it will usually be taken very seriously by health care professionals.

Power of attorney, in which you give another person the right to make certain decisions for you. If someone has power of attorney over you, he or she must sign contracts, manage money and do other basic legal tasks for you. This is best when you think there’s a chance that your mind could be affected by an illness or old age. A relative or a stranger can be given power of attorney -- but if it’s a stranger, he or she will likely expect to be paid.
There are two ways to set up power of attorney. Springing power of attorney is only effective under conditions that you specify. For example, you can give your child springing power of attorney if and only if you are diagnosed with dementia. Your child will have to prove that you’re incapacitated, using documents and testimony. You can also give someone durable power of attorney, which means he or she is immediately responsible for your decisions, and doesn’t have to prove you’re incapacitated.

Sometimes, a person becomes incapacitated without setting up power of attorney. When that’s the case, the court may appoint a guardian to oversee the person’s affairs. These people can be expensive, and sometimes, they’re not trustworthy. Wills and trusts lawyers can sometimes help families retake control over a loved one’s assets in this situation.



PAYMENT

Wills and trusts lawyers may charge a flat fee or an hourly rate, depending on the services you need. In fact, the fees a wills and trusts lawyer can charge for probate matters are often set by state law. A wills and trusts lawyer is likely to charge a small flat fee of under $1,000 for something small like a short will. Larger and more complicated matters will cost more, and are more likely to be charged by the hour. Complicated financial planning is likely to rack up expensive hourly rates. Lawsuits over disputed wills are almost certain to be expensive.

Wills and trusts lawyers should make their prices clear from the beginning. You can often meet with the lawyer for free or for a small fee, for an initial consultation.