While getting older does mean that your retirement days are nearing, it does not, in any case, mean that your days of worries are also nearing an end. This phase of life will have its own set of challenges, one of which is estate planning. In this article, we cover how real estate attorneys for senior citizens can help with estate planning issues.
While the age of being categorized as a senior citizen may vary according to the source, if you by any chance happen to qualify for this category, it simply means that it is time to take care of another two important things in life.
The first thing is about matters related to elder law planning for which you will need to hire an elder law attorney.
The second thing covers issues related to estate planning for which seeking professional guidance of a real estate attorney for senior citizens will be required.
Although elder law attorneys are also well versed in estate planning matters as well, it is always recommended to hire legal services of a more professional and experienced attorney who specializes more in estate planning matters.
In simple words, this means hiring a real estate attorney for senior citizens who has more knowledge in handling affairs related to estate planning.
Both elder law planning and estate planning directly concerns and affects senior citizens from various points both during their life and after death. Due to this magnitude, resorting to carefully framed and professionally sought legal advice and assistance should be a preferred choice in matters related to elder law planning and estate planning both.
Difference between elder law planning and estate planning
While this article is mainly about hiring a real estate attorney for senior citizens and how he can help in estate planning matters, it is also important to briefly understand what elder law planning is.
From a general perspective, both elder law planning and estate planning involve planning matters in the long term or for the future. However, technical differences between the two do exist and make each one separate from the other.
What is elder law planning?
Elder law planning is a broad term that involves the planning of matters related to the handling of income, money, and assets and how they should be applied to benefit and take care of their aging owner.
In simple words, elder law planning is about what happens to the things which a senior citizen owns while such a person is alive and how they can be preserved and used to help him navigate through the old age days of his life.
While elder law planning includes other things as well, in some aspects estate planning also falls under the elder law planning category.
What is estate planning?
Contrary to the elder law planning discipline, estate planning is about what to do and what course of action is to be followed to address matters related to the things that a senior citizen owns, in the event of his death or should he become incapable of taking care of himself.
In other words, its basic concern is about enforcing a senior citizen’s will and accordingly bequeathing his assets, properties, and other forms of ownership among his spouse and heirs preferably with a tax-saving strategy.
How does estate planning work?
The working structure of estate planning will primarily involve three goals with regards to the property of the senior citizen who has either passed away or has become incapacitated. These goals are –
This means structuring ways so that the business and other owned assets of the deceased or incapacitated person continue to remain and operate in their usual manner.
For example, by setting up a trust to hold all assets and properties until the time that the trustor wants it to hold and then distribute. Distribution of assets and properties held under trust may be done before the trustor’s death or after he dies.
This includes appointing a person who can manage the affairs of the senior citizen if he dies or becomes incapacitated.
For example, in the case of a trust, the trustee will need to appoint a trustee to manage all the affairs of the trust and take care of the beneficiaries which may be the spouse and minor children of the senior citizen. Similarly, he can also appoint a power of attorney to take actions and decisions on his behalf during his life if he becomes incapable of doing such on his own.
The last and the most important is about passing on or distributing what is leftover by the deceased person. Usually, the will contains how the deceased person wanted to distribute his wealth, properties, and businesses, etc. among his spouse and heirs. However, a trust can also be created for the same purpose.
The basic difference between the two is that a will becomes executable upon the death of the person making it. But the execution of a will can become a lengthy process as it should pass through a legal process called probate.
On the other hand, a trust becomes effective from the time it is created and needs not to go through probate to become effective. In fact, trusts are sometimes used to avoid probate as well.
How can a real estate attorney for senior citizens help?
Two of the major tools used in estate planning are a will and trust. And while the creation of both these estate planning tools does not necessarily require the appointment of an attorney; it is always recommended to appoint one for avoiding legal pitfalls.
This is because any complexity, ambiguity, or ignorance of the law if found to exist in the will document or the trust deed can result in litigations and disputes, the outcome of which may not favor the spouse, heirs, and the beneficiaries in the manner that the deceased person would have wanted.
Therefore, by hiring the legal services of a real estate attorney for senior citizens, much possible trouble can be avoided.
What are a will and a trust?
A will is a written document that contains the wishes of the deceased person instructing on how he would like his affairs to be handled after his death. These affairs include naming a guardian of his minor children, making of trust to hold property and other assets for a certain period until all is passed to his legal heirs, naming the persons to be appointed as trustees, naming the beneficiaries, and/or simply the distribution of all his belongings between his spouse, children, friends, relatives, etc.
A will becomes active only when its maker dies. Although the contents contained in a will may be challenged in a probate court and therefore the court may suggest following a different route of events as against what is mentioned in the will.
A trust is a fiduciary relationship in which the trustee, the person who creates it, assigns another person or person known as the trustee, the rights and controlling powers of certain assets and property, with the ultimate objective of providing benefit to another party known as the beneficiary.
Unlike a will, a trust is fully executable from the time it is created which may be during the life of the trustor or after his death if created by a will.
Trust deeds do not need to be passed through probate. Moreover, they can also be terminated by the trustor during his life due to the nature of the trust or when certain conditions or the objective of their creation has been fully achieved.
Areas where a real estate attorney can help in estate planning
A real estate attorney for senior citizens can help in the following areas of estate planning –
- Appointment of a guardian for the dependents or the minor children of the senior citizen.
- Name a person as an executor of the estate as mentioned in the will.
- Setting up trust accounts and structuring them to limit the applications of the estate taxes.
- Managing matters for proper funeral arrangements. For example, a will might mention the burial ground where the deceased person wishes to be buried.
- Making arrangements for giving away portions of the estate to charitable and non-profit organizations to again reduce the application of estate taxes. These arrangements can be recurring such as done annually to limit the value of estate from not exceeding the estate tax threshold.
- Appointment of a durable power of attorney to manage assets and investments in the event of the senior citizen becoming incapacitated.
Hiring a real estate attorney for estate taxes
In many states, the federal and state taxes such as inheritance tax that apply upon the passing on of property from a deceased person to his spouse and heirs could significantly impact the amount of what is left for distribution between the family members.
In such a case, a real estate attorney for a senior citizen can guide on reducing or eliminating the chances of such estate tax liabilities in the following ways –
- By creating an AB trust.
- Funding education of grandchildren through the estate in a way that is tax efficient.
- By reducing the volume of the estate by giving away portions of it to charitable organizations while the senior citizen is alive.
- By using estate freezing strategies.
Hiring a real estate attorney for senior citizens can help in planning things as per the wishes of a person. Remember that whether a person takes steps for proper estate planning or not, his estate and everything that he owns can be contested in court by his heirs and any other person.
In such a case, the matters decided by the court will either favor the wrong person or may not favor anyone at all. For example, if estate taxes become applicable on a deceased person’s property and estate, a major portion of what is left will go to the state first, leaving quite little for distribution between the heirs.
Therefore, it is better to appoint a real estate attorney so that such things could be prevented, and necessary steps could be taken to keep a major portion of the wealth within the family.