Willis & Henderson, P.A., has substantial experience in estate
planning, and can assist you in carrying out your wishes after
death, with the least tax consequence possible.

This is accomplished by having a valid will, and perhaps a living
trust, and/or an irrevocable life insurance trust, or through
other, more sophisticated techniques. Wills, trusts, and powers
of attorney are discussed below.

Wills

Transfer of your assets after death is governed either by your
will or by statute if you don’t have a will. In order to prevent
the State from deciding how your property is disbursed upon
your death, you will need a will. If your estate warrants it, you
may also need other estate planning devises, discussed below.

A will can be a very flexible document, disposing of your assets
as you wish, setting up trusts to take care of family members
after your death and to take advantage of any federal death tax
exclusions or credits to which you may be entitled.

A will must be probated, however, resulting in some delay in
the disbursement of assets. Also, your will becomes public
record when it is probated. If your assets are sufficient to
warrant it, and expediency and privacy are concerns, you may
want to consider a living trust discussed below.

Living Trusts

If you have substantial assets, and you are interested in
avoiding probate, or in privacy, a living trust may be
appropriate for you. Your property is conveyed to the trust, is
managed by the trustee (which will be you until your death or
disability) and, upon your death, the successor trustee named in
the trust disburses the assets as specified by you in the trust.

A trust is not admitted to probate, meaning that the terms of it
are private, and the trustee does not need a court order to
convey any of the property.

A living trust also has the advantage that if you own real estate
in another state, your personal representative will not need to
open an ancillary estate in that state in order to transfer the
property, so long as the property has been transferred to the
trust.

Although a trust may save some probate costs, the value of the
trust is still part of your gross estate, meaning you do not save
any taxes. Also, the trust does not protect your assets from your
creditors, and any income from trust assets flows directly
through to you.


Irrevocable Life Insurance Trust

If the amount of tax paid by your family upon your death is a
consideration, an irrevocable life insurance trust may be
appropriate for you.

This type of trust holds life insurance policies, and is the
beneficiary of the policies. Upon your death the trust receives
the proceeds, which provides a source of ready cash to pay
taxes or to buy assets from your estate (or your trust) at fair
market value, and then sell them in due course, rather than
placing your estate in the position of selling the assets in a
hurry to raise cash.

Power of Attorney

A power of attorney allows you to appoint someone now who
will take care of your affairs if you become incapacitated in
the future. Your family would otherwise need to go to court to
have a guardian appointed, and that person would be
answerable to the court.

The person you name is called your attorney-in-fact, and has
whatever powers you give him or her in the power of
attorney. All estate plans created by Willis & Henderson include
a power of attorney as part of the price.

Advance Directive

An advance directive, sometimes known as a living will, is
necessary to instruct your family and your doctors what to do in
the event you are hospitalized and are unable to make medical
decisions for yourself.

This document appoints a person to make those decisions for
you, and provides information to the doctor and that person
what your wishes are as to life support, pain medication, and
other related things. Every estate plan created by Willis &
Henderson includes an advance directive as part of the price.
Willis & Henderson, P.A.
Attorneys at Law
3290 North Ridge Road
Suite 210
Ellicott City, MD 21043

410-461-9400
Wills and Trusts    

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