FAQs: Williams & Doddridge PA answers your estate questions.
Why a Will?
Regardless of one’s wealth, basic estate planning documents are often sufficient for end-of-life planning. A last will and testament may specify that your spouse, children, friends, or preferred charities receive your assets after death. Other assets, such as life insurance or retirement accounts, are mostly controlled through beneficiary designations. The designations allow the accounts to pass outside probate and ensure they reach your named beneficiaries. A married couple with adult children and whose wealth is mostly comprised of their home, joint accounts, and retirement/life insurance accounts may prefer a simple estate plan that covers only essential items.
Why a Trust?
Many different types of trusts can be customized to carry out your end-of-life wishes. If you have any of a variety of unique situations – special-needs or minor children or grandchildren, out-of-state real property, beneficiaries suffering from addiction, creditors, or problematic marriages – Williams & Doddridge PA strongly encourages a trust. Trusts offer two primary benefits: probate-avoidance and the ability to control assets beyond your passing. Customarily, assets going through probate are immediately disbursed to heirs without conditions, after payment of creditors. Assets titled in trust do not go through the retitling process of probate and can be transferred to your beneficiaries or held by a trustee for the benefit of your heirs.
Should I title my Homestead in my Trust?
In Florida, homestead real property offers individuals and married couples significant flexibility in their end-of-life planning. Homestead property, titled individually or as husband and wife, is almost always protected from creditors. Individuals should transfer their homestead into a trust with caution, as doing so could compromise their property protection. Due to constitutional restrictions, Williams & Doddridge PA further advises clients not to place their homestead into joint trusts.
Should I make my trust the beneficiary of my retirement account?
Retirement accounts like 401(k)s and IRAs, as well as other tax-deferred accounts, cannot be owned by trusts. However, trusts can be the beneficiary of the accounts. Still, Williams & Doddridge PA recommends clients consult with their CPA and exercise caution in using this strategy. Our firm can can help structure trusts or amend current trusts to deal effectively with tax deferred account disposition within IRS regulations.