Estate Planning
Do I need an Estate plan?:
Yes, everyone should have an estate plan in place. Estate planning is extremely important because it allows a person to distribute their assets according to their instructions as specified in the Last Will & Testament. Estate planning is specifically tailored to each individual, based on the client's concerns, taking into consideration the individuals circumstances, goals and financial needs. A complete estate plan should include various documents including but not limited to: a Will, a Power of Attorney, a Healthcare Power of Attorney, and a Living Will.
Do I need to be wealthy to have an Estate plan?:
NO! All individuals should create an Estate plan that expresses their wishes as to how they want their assets disbursed upon their death. Additionally, individuals with minor children should create a Will in order to express their choice of who should be appointed the Guardian of their children in the event a guardian appointment becomes necessary. Many estates require probate administration. Usually this process is much easier and less expensive if a Will is in place because the clear instructions minimize the required court intervention.
What happens to my assets if I don't have an Estate plan?:
If a person dies without a Will then the intestacy laws of the State will determine how their assets are to be distributed. The deceased person's desires of how the assets should have been distributed are not considered. The person appointed by the court to administer the Estate will not have any discretionary authority to act for the Estate and will not be authorized to act until the Probate court approves their plans. However, when a Will is in place the deceased person picks who they want to administer the Estate and this person is granted many discretions in the body of the Will, therefore avoiding the need for so much Probate court involvement.
What is the difference between a Will and a Trust?:
A Will is a set of directions disclosing how a person wants their assets distributed upon their death. A Will is a revocable document that is not effective until the day a person dies. These directions need to be submitted, approved and administered in accordance with the Probate Court and the laws of the State. The Probate Court is selected based on the city or town of where the decedent lived or died. The Probate process in Rhode Island is an administrative process, which requires that an Attorney file a petition in the Probate Court in order to open the Estate. All of the documents filed in the Probate court become public record. The probate process in Rhode Island takes a minimum of 6 months to complete.
A Trust is an asset management tool that is created during a person's lifetime, which determines how the person's assets are to be managed during their lifetime and subsequently distributed upon their death. A Trust is effective as of the date it is created and may be revocable or irrevocable. In order for a Trust to be effective, assets must be transferred into the Trust after creation. This requires re-titling of assets, including real estate holdings, bank accounts and insurance proceeds, etc. Many different types of Trusts can be created depending on the client's individual needs and goals. Usually Trust assets are disbursed in accordance with the Trust Agreement. The assets are conveyed as a contractual transfer therefore allowing families to avoid Probate Court and eliminating any public knowledge of the decedent's financial situation. In some circumstances, Probate may still be required, depending on the asset ownership.