What is Estate Planning?
Estate Planning is the process of planning the manner in which your assets will transfer after your death. We work closely with you to develop a holistic approach that both carries out your wishes, while not being overly burdensome to execute for your loved ones. An estate plan should be reviewed on a regular basis. While we try and plan for as many contingencies as we can; changes in your family situation, tax regulations, other unforeseen events, or simply a change in your wishes may necessitate a change in your plan. A complete plan can utilize a number of documents and tools that may include a will, any number of types of trusts, Powers of Attorney, Living Will, Transfer on Death or Pay-On-Death Designations, and life insurance.
Who needs a will?
Almost everyone should have a will.
A will is a set of written instructions on how you would like your property distributed. If you do not have a will, then the law will decide how your property is distributed. By writing a will you are able to control more of the process and ensure that your property is distributed according to your desires.
What is a will?
A will is a written document executed by an individual that lists their wishes regarding the disposition of their property after their death. This includes real estate and personal property. An executor or executrix of the will is named. This person “execute” the will.
Wills can also cover the custody and care of minor children. Many times parents can use a will to establish a trust for their minor children and appoint a Trustee who will administer the trust on behalf of the children until they reach a certain age.
A will must be probated, which means it goes through the court system. There are costs associated with this.
It is important that your will is drafted and witnessed properly so that it can withstand any challenges that may be made to its validity.
What is a trust?
Trusts can be structured in numerous ways depending on their purpose. One similarity is that all trusts are a legal entity created for a trustee to hold property for the benefit of an individual/s.
Even if you have a trust, you still need a will. Individuals with trusts should have a Pour-Over Will. This means that if there are any assets not owned by the Trust, they will ‘pour over’ or go into the Trust.
What type of gift can I make?
As part of your will or trust, you have the opportunity to leave a bequest to your beneficiaries. Gifts to individuals fall into four general categories:
- Specific Bequest: A gift of a specific item to a specific individual
- General Bequest: Typically a gift of a set sum of money
- Contingent Bequest: A gift contingent on a condition being satisfied prior to the distribution being made
- Residuary Bequest: A gift of everything left after debts and the other bequests have been made
Gifts to charities also fall into four general categories:
- Unrestricted Bequest: Just like it sounds, for the organizations general purpose at the complete discretion of its governing board
- Restricted Bequest: Requires that the funds be used in a specific fashion
- Honorary or Memorial Bequest: A gift made in honor or memory of another
- Endowed Bequest: Restricts the principle of the gift, and allows for distribution of only the income or a small percentage of the total each year.
As with each step of your estate plan, there are advantages and disadvantages to each type of these gifts and how they work with each other.
Are there ways to avoid probate?
There are several ways to transfer property to heirs or beneficiaries after your death without a formal probate process. While there are many advantages to avoiding probate it is not the answer for every situation, there may be reasons that an individual desires their estate to be probated by the Court.
The most common way is by owning property as ‘Joint Tenants with Right of Survivorship.’ Many married individuals own real estate and joint bank accounts in this fashion. Another method is Transfer on Death deeds and beneficiary designations. Not all property can be transferred in this manner, to properly transfer your personal property your heirs or beneficiaries would need to utilize the small estates process if the estate qualifies.
Another common way to avoid probate is through the use of a trust or trusts. When assets are properly transferred a trust can successfully avoid all probate procedures.
To learn more, please look at our Estate Planning section. It is important that you talk with a professional about the limitations of these tools though.
What is a living will?
This lets people know your wishes when you are no longer able to. It provides that if two medical doctors agree that you will not recover from a terminal illness, your life will not be artificially prolonged. It provides that you will die naturally. This is a very personal decision and one that requires a lot of thought. A Living Will can be revoked by you at any time.
A Power of Attorney for either medical or financial decisions is different. Read below to learn more about Powers of Attorney.
This is also different from a Do Not Resituate (DNR) order. A DNR provides that you will not be resuscitated at any time. A living will only applies if you have a terminal illness.
Is a living will the same as a do not resuscitate (DNR) order?
No. A DNR goes further than a living will by stating your wish not to be resuscitated, for instance, if your breath or heartbeat has stopped. In many circumstances. Resuscitation may result in a long and healthy life once the problem has been solved. The terminal condition contemplated in the living will, in contrast, cannot be cured. For this reason, a DNR is only advisable in specific circumstances, whereas a living will is broadly and generally advisable.
What’s the difference between a living will and advanced directives?
Living Will, is simply the common name for an Advanced Directive. An Advanced Directive is a document giving instruction to doctors and other caregivers on the type of medical treatment and services you wish to have either administered or withheld. Many consider Living Wills, Do-Not-Resuscitate, and Durable Power of Attorney for Healthcare to all be Advanced Directives. Kansas first passed a Natural Death Act in 1979, much of it is now found today under KSA 65-28,101 et seq.
What is a Power of Attorney?
There are two common types of Power of Attorney, financial and medical.
A Financial Power of Attorney will be authorized to handle your financial matters for you when you are no longer able to.
A Medical Power of Attorney will make medical decisions for you when you are no longer able to.
Think long and hard regarding who you want to assume this role. This is a job with a great deal of responsibility. It is important to choose someone you trust and whom you are confident will honor your desires and wishes.
Be sure to talk to your Power of Attorney about your desires and wishes so they have a better idea of what you want.
My husband and I are getting up in years and would like to add our child’s name to the title on our house. A friend says that may not be wise. Why?
There are many potential problems with this arrangement, and frequently it does not achieve the desired result. There may be gift tax implications. Depending on the value of the property and unless the child can prove his or her actual contribution to the property, the property may still remain subject to estate and inheritance tax. If the property is sold, it will require the signatures of the child and his or her spouse to transfer title. If the child becomes involved in litigation or a divorce action, or has tax problems, the property may be subject to a lien, attachment or transfers.
My husband and I just want to leave everything to our two children.
Do we really need a will? Won’t the state just divide up our estate like that anyway?
The result under Kansas law will depend upon many factors including how the property is titled, who your heirs are, what names are on the property and the status of Kansas law at the time of your deaths.
Estate planning may benefit your estate by protecting some of your heirs or by providing savings in estate or inheritance taxes.
If your children are minors, you may want to nominate whomever you would prefer to be guardian and conservator of the children and their inheritance.
If there are stepchildren or this is a second marriage, special provisions may have to be made in your will. With a will, you can ensure that your property will be distributed according to your wishes and be assured that you have provided for the foreseeable contingencies.
Fax line: (620) 266-4449
Mailing Address: P.O. Box 237 Hillsboro, KS 67063