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Wills and Revocable Trusts

All Protect Your Heirs With These Documents



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Updated 11/23/2016

Federal Employee's CSRS & FERS Wills & Trusts

All retiree’s and their spouses should have a will. A will is the basic tool that you need to distribute your assets to those who you wish to inherit it. Trusts have many benefits and several of the major ones are probate avoidance, the ability to list any asset in the trust even those items such as collectables that don’t have legal registrations like homes, stocks and bonds.

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Wills

Property left by a will is subject to probate and you can avoid probate with the use of joint tenancy, Pay On Death (POD) asset registration, beneficiary designations, and basic revocable living trusts. When you use these probate avoidance methods the main purpose of the will is to designate a guardian for minor children, transfer some property that is difficult to transfer otherwise such as vehicles, and to transfer all residual estate property to your heirs. The will captures your residual estate that includes unexpected gifts, lottery winnings, or asset acquisitions that you did not have time to register using other probate avoidance techniques. Plan Your Estate is an indispensable estate planning guide that describes everything you need to know and what to do in easy-to-follow steps. You can use Quicken WillMaker Plus to write a basic will and they also offer trust software. All federal employees who are approaching retirement and those who are already retired who haven’t completed an estate plan can use these resources to guide them through this process. If you have complex issues to deal with contact an estate planning attorney to help you draft your documents.

CAUTION: If you hire an attorney hold them to an estimated price for their services. Many charge high hourly rates, sometimes in the $300 to $400 dollar range, and every time you call or email them with a question you receive a bill. Find an attorney that will draft your documents for a fixed price and not bill hourly. If you can't find one that will do them for a fixed rate ask them for a price range and insist that they do not charge more than the maximum amount quoted on their estimate. Insist they include a statement that says they will not charge more than the maximum quoted in their offer to prepare your estate plans.

Living Trusts

A living trust is a document that allows you to transfer property direct to your heirs after your death without going through probate. Probate delays the distribution of your assets for a year or longer and the attorney costs can be as much as 5% or more of the estate’s value. Trusts are ideal for transferring stocks, bonds, homes, collectables, antiques, and other assets that you can’t easily transfer through POD, joint tenancy or beneficiary designations. Typically you name the trust after the originator, called the trustee. For example if you have stocks that you want to add to your trust you would transfer registration from your name to “(Your Name), as trustee for the (Your Name) Trust.”

As trustee you have full control over all assets in the trust for as long as you live. You can sell all trust assets and use them anyway you choose. Only after you die does the trust become irrevocable and the successor trustee that you designate in the trust document follows your wishes and distributes your assets according to your wishes.

You can make a list of your coin collections, memorabilia, antiques, and art with good descriptions and add this list to your trust document. Then, your successor trustee will be able to distribute the assets direct to your heirs soon after you die without going through probate. Another advantage is that unlike a will, that is registered with the county and a public record, a trust document is confidential and does not have to be registered with the county. Only your successor trustee and heirs who are inheriting will know what is in the document.

 

 

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