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How do Trusts and a Will Fit into an Estate Plan?

Thanks for joining! Today we’ll be speaking with Dana Wine, partner at Freeman Wine. The topic on the table is estate planning packages. The thought for the day is to glean as much as you can so you’re ready for your first meeting with an estate planning attorney to understand the terms and the things that you’re going to talk about. The action is to set yourself up with some type of plan, whether it be a will, a trust, or power of attorney. Of all the things we’re going to talk about today, make sure that you yourself are set up and ready to go because everybody should have something in place.

About Dana Wine

He is an attorney and a partner at Freeman Wine, his law firm in Charleston, South Carolina. He has been in practice for about 27 years. His practice focus is entirely on estate planning and estate administration.


Why Plan An Estate

There’s a lot of different reasons why people come to Dana White. Sometimes it’s a young family. They recently had children, and they want to make sure that should something happen to them, their children are provided for. Sometimes it’s someone who is recently retired and they’re in a mindset of planning in general, for their future and for the remainder of their retirement in life. Often he talks to people who recently had a bad experience after losing a loved one. Their estate was difficult to administer. There was a family inciting financial loss, and that can be a real motivator. He’s talked to people who have relocated to the area recently, and as part of their relocation, they’re trying to set up relationships with professionals locally. People are told that this is something that they should do and that’s all they know. You’ve got people that are retiring and entering phase two or three of their life. The joining factor above all is they want to take care of something, take care of their lives and what they have left of their lives, and they want to live it well or they want to take care of somebody. In case something happens to them. 


Building A Will Alleviates Stress

People first want to make sure that they are taken care of. And that’s a big piece of estate planning is in capacity planning. People are often very focused on what would happen after their death. But also very important is what would happen if you’re alive but incapacitated. And as part of a state planning, Dana’s team creates documents like living trust, powers of attorney to make sure that the client wishes are carried out in the event of their incapacity that they’re cared for and that they’re cared for by the person that they choose. This ensures that there is a plan for what happens after their death is important because either they have loved ones that they want to take care of and they want to provide for, or they have a very specific idea about where they want their state to go after their passing. Sometimes it’s people, sometimes it’s charities, but it’s what they worked hard for, and they want to make sure that it goes where they want. 


Defining Living Trust, Will, and Power of Attorney 

Power of attorney is a document that says who you name to make medical or financial decisions for you in the event of incapacity. A will is a document that says how you want your probate access to be distributed after your death and who you want to be in charge of your state and carry out the wishes in a will. A living trust is similar to a will, except that it generally works to remove the assets from the probate process, which can make for an easier and quicker administration. And a living trust will cover what happens if you are incapacitated and can’t manage finances and where your estate goes after your death got you. So if you have your living trust that works while you’re alive. You have your will. That happens after your death and your power returning, and typically you’re providing someone if they say they want the full package. They’re getting all three. They can be independent, but typically a proper estate plan has all of those components. Estate planning is very important to be completely comprehensive and make sure that we plan for all aspects of incapacity and after death. So we have a living trust which can own assets during a person’s lifetime, which will address what happens to the trust assets during your life and after death. For assets not owned by a person’s trust, the power of attorney works in tandem with the living trust in the event of incapacity, and they will make sure that if anything ends up in probate, that ultimately is put into the living trust on death. 


Time Frame Of Document Creation

The exact time frame depends on the client, but on average, it can take about a month. The reason it depends on the client is because often people come to Dana and after meeting with him, they have a lot to think about, and sometimes they need to talk to their family and they need some time to think. And he always likes to partner with other professionals working with his clients, like financial planners, often CPAs. So we make sure that we have a comprehensive team approach to helping the client. Generally, they’ll meet with Dana and they’ll have a lot of information. They learn education at the first meeting, and then move on to designing their specific estate plan, then executing documents and the final step is making sure that their assets are coordinated with their wishes and their plan. Financial planners are an integral aspect of estate planning. Makes the process a lot easier for clients because we can work together to shorten that time frame of what they need to do to complete the estate plan. 


Issues With Do It Yourself Packages

There’s a lot of reasons why doing online documents or do it yourself documents are problematic. Dana meets with many people who believe their situation is simple, and very few people actually have a completely simple situation because they have children or they don’t have children, they have people they care about and things that they want to happen that are very specific if they were to become incapacitated after their death. When you do it yourself, there is no conversation with an attorney. No one is on the other end, really hearing what is important to you and what you need to plan for and what you want to protect and you end up with a one size fits all approach. Many people are exactly the same in what their goals are, what their wants are and what their needs are. And it also eliminates a part of the state planning that is really critical, documents are only one piece of this. You’ve got to make sure that the way your accounts are titled and beneficiary designations are done, coordinate properly and do it yourself estate planning to completely ignore that piece of it. 


Editing Documents

if your situation changes, people almost never have to go through the process again. Generally, changes can be made very easily. Sometimes it is a change in the law. Sometimes it’s a change in circumstances. Once Dana’s team has set up an estate plan for someone, if they come back down the road, they’re never starting from scratch. The foundation is already there, and generally the changes are quicker, less expensive, and fairly easy to do. So estate planning really isn’t a one time in life event. It’s a process over time to make sure that what you want is reflected throughout your life.


Strategies For Inherit Issues

Issues arising are dependent on an individual circumstance for people who are worried about their errors, inheriting and being irresponsible or needing to protect what they inherit either from themselves or from outside forces, like divorce, creditors, judgments, lawsuits. We typically are going to set up a continuing lifetime trust for their beneficiary, which will allow what that beneficiary inherits to be held in trust to be managed under the terms that the client specifies for the life of their beneficiaries, which protects from irresponsible spending, creditors, lawsuits, judgments, divorce and some of the other unfortunate things in life. It takes some legacy planning. So you’re planning for your life and then the next thing is to protect those assets. As a client working on state planning, you’re working on how you hand down your legacy to other people, and the choice is yours right now. The other question that comes up a lot is around capacity. A lot of people do not want to end up in a nursing home. What kind of protection can you or can you plan for that situation to where you could say this person is not going to end up in a nursing home regardless of their mental state. One of the most important pieces of planning so that you are able to live out your life where you want to is financial planning and starting to think about that at the right time earlier in life, working to make sure that your state has what you need for the care that you want down the road should you need it from an estate planning perspective. First, it’s important to make sure that the right people that you want to be making decisions about your long term care are in place to be able to do that, should you need it, documenting and memorializing what your wishes are and making it easy for those wishes to be carried out by naming whoever you choose to be in charge of the assets that you have to use for your need. 


Children As Executors

A lot of times parents think it’s a great honor to name their children as executors of their trust and trustees. However, sometimes the grieving process begins and they’re now saddled with being an executor on top of or being a trustee on top of incapacity in death. What is the difference between having them take on that role versus a corporate trustee. This is very individual and It really depends on family dynamics, their child relationship with siblings, the ability and interest for a child, and taking on those roles after a parent has died, what their skill set is. And for some people, it is a right and natural choice to name a child to serve in that role. But for many people, they don’t feel either confident in their children’s ability to serve in that role or they don’t want to burden their children. Or there are family dynamics which would complicate a child serving in that role and could put a strain on family relationships. And in those cases, corporate trustees are great tools to make sure that you address those issues. They can prevent family conflict. They can take the burden off children in administering a parent estate. It ends up being a lot more complex. For example Dana worked with a client where there was really not a thought at that immediate time that incapacity was looming in the future years down the road. Unfortunately, this client developed dementia and got to a point where they were unable to make medical and financial decisions for themselves. Because we had the estate plan in place to plan for their incapacity. It was a much easier, much less expensive, much more efficient process for their chosen person to take over their medical and financial decisions. We were able to avoid court action, which would have required a conservatorship which can be very time consuming, expensive and restrictive and very seamless. Their chosen in capacity agents stepped into place to make sure that they were provided for financially and medically. Another example is a dear client of Dana’s who worked with him and his wife to set up a revocable living trust. They were recently retired. Their children were adults. They had Wills from when the children were young that were really outdated, and they just knew it was time to get everything in order. And a couple of years later, unfortunately, the client was diagnosed with a very aggressive form of cancer, and Dana was one of the first calls that he made, and he was able to reassure him that we had everything set up, and he was able to spend his final days a piece and with his family instead of worrying about what was going to happen to them after their death. And it was tragic for the family. But we were able to make the after-death state administration process much less difficult for them, and he had a lot of peace and knowing they had someone to turn to to help them when the time came.


The Importance Of Planning

If people are going to go in and talk to someone and create an estate planner like you must do these things, make sure these are added or at least a part of the conversation when you’re putting your state plan together. As previously mentioned, making sure that your state plan covers incapacity and death is important. Making sure that you are working with an estate planning professional, someone who focuses their practice on estate planning is critical. Just having the documents. Having your general practice lawyer just write you a will is often not going to do what you really hope and need it to do. Making sure that you have a healthcare directive is also something that can be easily overlooked. But those health care directives make sure that you are cared for and your end of life care decisions can also be made ahead of time. But the most important piece that people don’t realize when they sit down to think about estate planning is how important it is to make sure their assets, their accounts are all coordinated with their plan and how important it is to make sure that they create a team approach with the other professionals in their lives. 

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