Do you wonder about the many nuances of estate planning and if you have a comprehensive plan that covers it all? Have you ever pondered how the administration of a Will works, or if you should include your cryptocurrency in your Will? Or maybe you have a special needs child and are unsure how to provide for them after your death?
Every individual and family is unique, and the answers to many estate planning questions often depend on a cascade of factors. If you have a specific question about your situation, it is always best to ask a professional! That said, we’re on a mission to provide insight into the world of estate planning. To wrap up February, we’re providing general answers to several estate planning questions that we encountered this month. For additional insight and advice, you can always contact us to schedule the appropriate appointment!
Q: How does the administration of a Will work?
In order for assets in a Will to be transferred to a beneficiary, the Will must pass through the court process known as probate. For this to happen, the Will must be filed with the Clerk of Courts by the Executor, who is named in the Will. During probate, the court oversees the Will’s administration and provides the Executor with the official documentation necessary for them to carry out their tasks. It is the Executor’s responsibility to collect the deceased’s assets, pay any debts of the estate, and distribute the remaining assets per the terms of the Will. Probate proceedings can drag out for months or even years, and the deceased’s family may have to hire an attorney to assist in the process. This is one reason why some decide to create a Revocable Living Trust, which avoids the tedious probate process.
2. Q: How does buying or creating a business affect my estate plan?
If you are buying or creating a business, you’ll want to ensure your plan is updated to take into account your new assets. It’s also important to put in place a succession plan for the business and make sure your legal documents support your long-term goals. For example, there are documents that will ensure your interest in a company is transferred to the recipient of your choice upon your death. If you are creating an LLC or buying a business, make sure you contact your estate planning attorney to help!
Q: How should I include my cryptocurrency in my estate plan?
Just like any other property you want to pass on, detail in your estate plan who you want to inherit your cryptocurrency, and then include specific instructions in your will or trust how you’d like the accounts managed in the future. But do not include passwords or security keys in your planning documents, where they can be read by others. This is especially true for your will, which becomes public record upon your death. Instead, keep this information in a separate, secure location, and provide your fiduciary with instructions about how to access it (you can read more about cryptocurrency and your estate plan in this excellent Forbes article). Given the complex and highly encrypted nature of cryptocurrency, consider including provisions in your plan allowing your fiduciary to hire an IT consultant to deal with any technical challenges that might come up.
Q: Should I leave money for my child with special needs in my will?
The short answer is no. Here’s why: when planning for a loved one with special needs, you must be extremely careful and always work with an experienced lawyer. If handled improperly, you can easily disqualify your loved one with special needs from much-needed government benefits. Because individuals with special needs often require a lifetime of care, most of them rely on government programs to offset the exorbitant costs of such care. However, these programs have strict income limits, so if you leave money directly to a person with special needs, such as through your will, you risk disqualifying him or her for those benefits.
Instead, the government allows assets to be held in what’s known as a Special Needs Trust to provide supplemental financial resources for the person for the rest of his or her life, while preserving their access to government benefits. However, the rules for Special Needs Trusts are complicated and can vary greatly between different states. With the proper estate planning, we can make certain that upon your death your loved one with special needs will have the financial means they need to live a full life, without jeopardizing their access to vital government benefits.
Estate Planning is like a puzzle, with hundreds of unique pieces to fit together just right. These are just some of the many considerations that go into our planning! Though our plans are thorough, however, our process is simple – you can schedule a complimentary Family Wealth Planning Session to start your estate planning today.