Free Estate Planning Worksheet - Married

Include the value of any business property that you may own. Such property may include your share of a business (e.g., sole proprietorship, partnership, corporation, limited liability company, or other entity). It could include tools, equipment or other assets used in a business. Use your best judgment to determine its fair market value, the amount for which the property could be sold to a neutral third party. The accountant or tax return preparer for the business may be able to help you determine the value.

Include the current balances of your checking accounts, savings accounts, certificates of deposit, money market accounts, and other "cash" accounts. Use the balances from your most recent statements, or obtain more current balances through direct contact (e.g., phone or Internet access) with the institution that maintains the applicable account.

A Charitable Trust is a special trust that includes one or more charitable organizations as beneficiaries. A Charitable "lead" Trust pays the income of the Trust to the charity for a term of years, or perhaps until the death of the Grantor. At the end of that time, the remaining assets are distributed in accordance with the Trust to other beneficiaries, perhaps the Grantor's children.

The more common Charitable "remainder" Trust is a trust that pays the income to the Grantor (and perhaps the Grantor's spouse) during the life of the Grantor (and/or the Grantor's spouse), after which the remaining trust assets are distributed to one or more charitable organizations.

These trusts entitle the Grantor to a charitable income tax deduction at the time that the assets are irrevocably transferred into the Trust. In addition, in the case of a charitable remainder trust, the assets of the Trust are deductible from the Grantor's estate. This has the effect of reducing federal estate taxes that might otherwise have been payable. To qualify for these tax benefits the provisions of the Trust must meet very specific requirements of the federal tax code.

The Children's Trust offers a unique planning opportunity for parents with minor children. You can provide that the assets of your residuary estate will be distributed to a children's trust for the benefit of your children, or you can provide that a percentage of your remaining assets will go to a named beneficiary, with the remainder to a children's trust.

The children's trust provides funds for the health, education, maintenance, and support of your children until the youngest child reaches an "adult" age. Presumably, this is the same way that you would have provided for your children if you had survived: supporting all of them out of a common "pool" of assets according to each child's individual needs until the youngest one becomes independent. Often age 25 years is used because it offers the children an opportunity to attend college and "settle down" before receiving their trust shares outright.

When the youngest child reaches the specified "adult" age, the children's trust is divided into equal shares for the children and either: (i) immediately distributed, or (ii) distributed in several installments. For example, assume that Dave Will writer and his spouse Rosie have three children: Joel, age 6; Jay, age 4; and Justin, age 2. Under the first option, the children's trust would be maintained until Justin reaches age 25 years (or some other specified adult age). The trust would then be divided equally among Joel (now age 29), Jay (now age 27), and Justin (age 25). The goal is to preserve the trust assets until the youngest child attains "maturity." Under the second option, Dave Will writer might specify that the final distribution should be made in three installments at ages 25 years, 28 years, and 31 years. Now when Justin attains age 25 years the trust is divided into three equal shares, one for each child. Joel receives two-thirds of his share (1/3 because he has attained age 25 years and 1/3 because he has attained age 28 years), and Jay and Justin will each receive one-third of their respective shares. All three will receive their remaining shares as they attain the appropriate ages.

As you can see, providing for a trust for children can be appropriate if you have children who are have not yet reached an age at which it is appropriate for them to receive a large distribution of your assets.

If, at your death, your children are already older than the age established in the children's trust for their final distribution, the assets will be distributed outright to them, and the trust will not be used. The children's trust also includes provisions to provide for the possibility that the children will not be living at the time of final distribution of the trust assets.

Enter the current unpaid balance on any credit card obligations. Use the balances from your most recent statements, or obtain more current balances through direct contact (e.g., phone or Internet access) with the credit card company.

The Estate Planning Worksheet requests information regarding your priorities as to which persons should receive distributions from your estate. Often a spouse is the first choice to receive the entire estate, even if there are minor children. The assumption is that the spouse will provide for the needs of the children. However, it is also necessary to provide for the possibility that your spouse will not survive you, for example if both of you are killed in an automobile accident. In such a case, the second priority, often the children, becomes very important.

If you have children who are not also the children of your spouse, as in the case of children from a prior marriage, you may want to provide for both your spouse and the prior-marriage children as a first priority. Sometimes there is a child with a unique need which may suggest that a larger share should be provided to that child. Sometimes the unique need suggests that the distribution should be made through a trust rather than outright, so that a Trustee will be able to monitor the use of the funds.

If you do not have children, other family members, or perhaps charities, may be a high priority. Sometimes an elderly parent has special needs that you may wish to recognize.

Distribution Summary
The Estate Planning Worksheet provides an optional "distribution summary." Even though you may have already listed general priorities, this summary allows you to be more specific regarding distributions to beneficiaries. This summary allows you to indicate how your estate should be distributed, assuming that all of your intended beneficiaries survive you. This distribution summary is a summary of the residuary estate. In other words, the distribution summary assumes that specific bequests, if any, have already been made.

The topics shown below discuss estate planning alternatives and issues that are more complex. After reading the short summary that is provided, you may wish to request more information from an estate planning attorney.

The Estate Planning Worksheet is designed as a worksheet to lead you through the thought process that is required to prepare a will. This worksheet can be used for both large and small estates. The estimated value of your assets, minus the estimated value of your liabilities is critical information in planning your estate. A high value -- more than $5,000,000 in value at your death) -- suggests that more complex estate planning techniques may be required to minimize federal estate taxes. If your estates are expected to be larger than the applicable exclusion amount at the time of the death of the second spouse, you can use this worksheet to prepare for a conference with an estate planning lawyer who will ask for the type of information developed through your use of the Estate Planning Worksheet.

The Estate Planning Worksheet begins by requesting personal information about your and your family. Next, you are led through an estimation of the value of the estates of you and your spouse. The third step helps you sort through your priorities as to what persons or entities (beneficiaries) should receive distributions from your estates. If you have minor children, an optional section is available to work through questions that help you provide for them. Finally, the worksheet provides some basic information regarding advanced estate planning techniques that might be discussed with a lawyer in connection with planning for unique or complex estates.

The estimated value of your assets, minus the estimated value of your liabilities is critical information in planning your estate. A high value -- more than $5,000,000 in value at your death) -- suggests that more complex estate planning techniques may be required to minimize federal estate taxes.

In general, each asset should be valued at "fair market value," the amount for which you could sell the asset to a neutral third party. The amount that you paid for an asset may be relevant in deciding fair market value, but cost is not the determining factor.

Keep in mind that you are entering estimated values. It is not necessary to spend a lot of time trying to eliminate minor differences between your best estimate and the actual fair market value.

Note: When entering values for property that you own jointly with another person, enter only the value of your share of the property.

The Estate Planning Worksheet offers three methods for your use in providing this information. Each method has its advantages.

No Detail: This method is the shortest and fastest. Simply enter one amount for your total assets and one amount for your total liabilities.

Brief Summary: This method allows you to enter estimated totals for typical asset and liability categories. The worksheet then adds the assets and deducts the liabilities for you. This method can be completed quickly if you already have a good idea of the values of your assets and liabilities by categories.

Full Detail: This method allows you to enter detailed information for each asset and liability category. The advantage to this approach is that in addition to obtaining a tax calculation, you also have a listing of your assets and liabilities, as well as a record of how you calculated the estimated value of your estate.

An "Executor" or "Personal Representative" is the person or entity named in the Will who has the responsibility of carrying out the terms of the Will. Those responsibilities are to collect the Will writer's assets, pay the debts and expenses of the estate, and distribute the remaining assets to the beneficiaries. Some states use the term "Personal Representative," rather than the term "Executor," but generally, either term is acceptable.

A sole Executor serves alone. Alternatively, you can nominate two or more persons and/or organizations to serve together as Co-Executors. All actions taken by Co-Executors must be unanimous. Therefore, difficulties and/or delays are sometimes encountered if:

1. the Co-Executors reside some distance away from each other and documents to be signed must be circulated among them, or
   
2. the Co-Executors are unable to unanimously agree on the same course of action.

A good choice of Co-Executors for many situations is a bank trust department and a family member. The bank can assume responsibility for all of the court documents, tax returns, asset management functions, and transfer documents, while the family member can provide useful insights about the beneficiaries for purposes of distributions. If you choose an individual and a bank as your first choice, in many situations, an alternate choice is to select the same bank with a different individual.

Some states require (or at least prefer) that at least one Executor be a resident of your state or else be bonded. Therefore, in order to allow an out-of-state Executor, who is your primary choice, to serve without bond, you may want to add a Co-Executor who is a resident of your state.

In addition to creating and signing a Living Trust document, assets must be transferred into the Trust. A Living Trust only applies to the assets that are actually transferred into the Trust. Assets can be transferred both at the time of the creation of the Trust and also at later times. Separate transfer documents must be used for this purpose because the Trust document itself does not contain any language of conveyance or any list of assets. In most cases, the new named owner of the assets will be the trustee of the Trust. For example, an account for Janice J. Jones who has created a trust dated 11/27/2006 could be transferred into the Trust by changing the account name to "Trustee of the Janice J. Jones Trust dated 11/27/2006."

The following describes how various assets are transferred into the Trust:

Tangible personal property can be transferred into the Trust by using a Bill of Sale.

Bank accounts can be transferred into the Trust by using the appropriate bank form.

Stocks or bonds in a brokerage account can be transferred into the Trust by using a Stock Power document. Consult your broker for assistance.

Vehicles can be transferred into the Trust by using a change of title form. Contact your local Motor Vehicle Department for assistance.

A life insurance policy can be transferred into the Trust by using a change of ownership/beneficiary form. Contact your insurance agent for assistance.

An IRA or pension plan can be transferred into the Trust by using a change of beneficiary form, but it is not recommended. Contact your plan administrator or a lawyer for assistance.

Real Estate can be transferred into the Trust by using a deed. Contact a lawyer for assistance.

Business interests can be transferred into the Trust through various means. Contact a lawyer for assistance.

Property that is jointly held (for example, real estate held jointly by spouses) can be transferred into a trust, but the process may require more careful planning because of the joint ownership. THIS PROCESS MAY REQUIRE THE USE OF PROFESSIONAL ASSISTANCE, INCLUDING THE ADVICE OF A LAWYER.

A guardian is the person nominated in a Will to have custody of the minor children, if a parent is not available. The guardian has control over the "person" (but not the property) of the minor children, providing for their PHYSICAL care, health, education, and welfare. In contrast, if a trustee is appointed to carry out the terms of a children's trust, that person or organization provides for the children's FINANCIAL needs, managing the assets held in the children's trust and making payments to the guardian to be used for the children's care and/or making payments directly to the children. The same person(s) can serve as both guardian and trustee.

If co-guardians are nominated, it is recommended that they be married to each other and living together; otherwise additional court involvement will be necessary in order to establish how physical custody will be arranged.

Naming a person as a guardian in a Will is merely a nomination, not the actual appointment. Only the court can appoint a guardian. As expected, the court usually accepts the nomination specified in the Will, but it is possible that interested family members or others may challenge the appointment, in which case the court will listen to both sides before making a decision whether to appoint the person nominated in the Will or a person suggested by others. The court will appoint the person nominated in the Will unless it finds compelling reasons not to do so. The court's guideline in making the appointment is the court's determination of what is in the best interests of the children.

Include the current values of your stocks, stock options, bonds, mutual funds, and other investments. For accounts with brokerage firms, use the balances from your most recent statements, or obtain more current balances through direct contact (e.g., phone or Internet access) with the brokerage firm that maintains the applicable account. For stocks, bonds, and other securities that you hold directly in your name, you may be able to obtain price quotes from your local newspaper or an Internet source. Tables can be obtained from banks and Internet sources to value U.S. savings bonds.

A Joint Living Trust can be created by a person and that person's spouse. In some cases, this method is preferable to creating two separate Living Trusts, especially where assets to be contributed are held jointly and could not easily be divided to be placed into two separate trusts. Another advantage is that the joint trust is created in a single document rather than multiple documents.

Typically, the Joint Living Trust provides for both spouses, who are the Co-Grantors, to serve as Co-Trustees. They serve for such time as they are able and willing to manage the assets of the Trust during their joint lifetime. After the death or "disability" of one, the survivor or competent spouse can continue as Trustee.

Payments
During the Co-Grantors' lifetime, payments of the net income of the Trust are made to them at fixed intervals. The amount of the payments can be changed from time to time at the request of either Grantor.

Beneficiaries
When the first spouse dies, the Trust provisions designate the beneficiaries who will receive that Grantor's property. At the option of that Grantor, these provisions can include specific distributions and distributions of the trust assets contributed by that person. These provisions can also include retaining those assets within the trust for the benefit of the remaining spouse and/or the minor children. If the deceased Grantor was serving as a Trustee, the Successor Trustee (which may be the surviving spouse, now as surviving Co-Trustee), carries out these provisions of the deceased Grantor's directions.

Important Factors to Consider
There are several important factors that must be considered in creating and using a Joint Living Trust, in addition to the factors that apply to an individual Living Trust. (Read the Living Trust topic for information about the individual Living Trust; read the Living Trust Advantages topic for the advantages of a living trust in comparison to the Will.)

1. TAX CONSEQUENCES. Generally, the income earned on the assets transferred into a Joint Living Trust is taxable to the spouses on their individual or joint return.

Furthermore, upon the death of the first spouse, the assets contributed by that spouse (possibly the whole of community property, in community property states) are generally given a "stepped-up basis" to Fair Market Value. This can become significant if the assets are eventually sold. Normally, taxable gain is computed based on the total appreciation of the assets over their cost. "Stepping up the basis" means that any such appreciation to the date of death can be ignored, and the new assumed "cost" of the asset is its Fair Market Value at the date of death.

EXAMPLE: Assume Joe purchased 100 shares of stock for $1000, and then contributed this stock to a Joint Living Trust which he set up with his wife, Mary. Joe died when the fair market value of the stock was $2500, having appreciated in value by $1500. As the surviving Trustee of the Joint Living Trust, Mary later decided to sell the stock when it had appreciated even further to a fair market value of $3000. Without a "step-up in basis," Mary would have had to report a taxable gain of $2000 ($3000 selling price less the original cost of $1000). But with the "stepped-up basis" to the $2500 fair market value at the date of Joe's death, Mary need only report taxable gain of $500 ($3000 selling price less the new $2500 stepped-up basis).

For property that is held jointly (for example, real estate held jointly by spouses), you should obtain the advice of a tax professional or lawyer in order to ensure that the property is transferred properly.

2. TRANSFERRING ASSETS. Where assets are held jointly between spouses, transferring them into a Joint Living Trust avoids the issue of whether it may be difficult to fund two separate trusts with personal assets that are not easily divided. If those assets were held jointly with survivorship rights, such survivorship status may be lost, but any income earned from them is still jointly taxable and the asset still benefits the survivor upon the death of the first spouse. On the other hand, if the survivorship status can be maintained, there may be greater creditor protection for the Surviving Grantor. If these considerations are important to you, obtain the advice of a tax professional or lawyer.

3. ESTATE PLANNING. The estimated value of your assets, minus the estimated value of your liabilities is critical information in planning your estate. A high value -- more than $5,000,000 in value at your death) -- suggests that more complex estate planning techniques may be required to minimize federal estate taxes.

4. FEDERAL ESTATE TAX. The 2010 Tax Act brought renewed the federal estate tax, but at much higher exclusion amount (the amount each person can transfer in total during life and at death without paying transfer tax) than previously and decreased the top marginal tax rate. For 2011, the estate tax exclusion amount is $5 million with a top tax rate of 35%. The exclusion amount will be adjusted for inflation in 2012.

Many states permit an individual to own property with another individual in a manner known as "joint with rights of survivorship." In such a case, when the first joint owner dies, the property passes to the second joint owner, even if the first owner attempted to give the property, through his or her will, to a third person.

In many cases this never becomes a problem because the joint property is owned between spouses, and the wills of the spouses provide that the property owned by the spouses should be given to the survivor of them; thus, there is no conflict between the ownership of the joint property and the provisions of the wills. However, if an individual owns property with another person "joint with rights of survivorship" and wants the property to pass to a third person under the Will, a lawyer should be consulted.

If property held "joint with rights of survivorship" is transferred into a trust, such survivorship status may be lost. A lawyer should be consulted in connection with such a transfer.

Your estate includes the value of life insurance policies that you own at your death. If the policy is on your life, the value to be included in the estate is the amount of the death proceeds. This amount is usually the face amount, but can be more or less than the face amount depending on the pay-out terms of the policy. If you own a policy on someone else's life (perhaps a child), the value to be included in the estate is the cash surrender value of the policy as of your date of death. Generally, do not include values for policies that you do not own, even if your life is the life insured by the policy.

An Irrevocable Life Insurance Trust is a trust created by a Grantor (and sometimes the Grantor's spouse as a Co-Grantor) to own life insurance on the life of the Grantor and/or the Grantor's spouse. The advantage of using the Trust, rather than simply owning the life insurance outright, is that the life insurance proceeds received by the Trust at the death of the Grantor are not includable in the Grantor's estate.

To create an Irrevocable Life Insurance Trust, a trust document is prepared and signed. The Trust then applies for a life insurance policy on the Grantor's life. As an alternative, an existing policy can be transferred into the Trust. However, if that is done, the life insurance proceeds will still be included in the Grantor's estate, unless the Grantor dies more than three years after the date of the transfer of the existing policy into the Trust. Annually, the Grantor makes contributions or gifts to the Trust so that the Trust has funds from which to pay the insurance premiums. Upon the death of the Grantor, the life insurance proceeds are paid into the Trust and distributed in accordance with the Trust provisions.

Providing Liquid Assets
Irrevocable Life Insurance Trusts are used most frequently as a means of providing liquid assets at the time of the death of the Grantor. For example, the Grantor may own a profitable small business worth $5,000,000, but has few liquid assets such as cash, stocks, or other similar investments. When the Grantor dies, there may be substantial federal estate taxes with little available cash to pay the taxes. The life insurance proceeds can be loaned by the Trust to the estate to pay the taxes. Often this is acceptable because the beneficiaries of the Trust are the same as the beneficiaries under the Grantor's Will. By using an Irrevocable Life Insurance Trust to own the life insurance, the estate avoids paying the additional estate taxes that would have otherwise been caused by having the Grantor directly own the life insurance and including the proceeds in the Grantor's estate.

Specific Provisions
There are many specific provisions that must be included in the Irrevocable Life Insurance Trust to avoid problems with the Internal Revenue Service. Further, the procedures followed by the Trustee in administering the Trust must be handled in a manner that avoids a successful challenge by the IRS that the Grantor is really the owner of the Irrevocable Life Insurance Trust.

If the IRS would succeed with that argument, the life insurance proceeds would be included in the Grantor's estate for federal estate tax purposes. Therefore, it is recommended that you consult with a lawyer, if you have further questions.

Life insurance, annuity, and pension plan agreements (and similar agreements) are contracts that permit an individual to name those who will receive the proceeds of such agreements either as primary or secondary beneficiaries. The designations filed with the insurance company control the distribution of the proceeds of these contracts, not the Will writer's Will, Living Trust, Joint Living Trust, or Pour-Over Will. Similarly, IRA accounts often allow the owner to designate a beneficiary who will receive the proceeds of the account upon the death of the owner of the account. Thus, after any drafting of a Will, Living Trust, or Joint Living Trust, the Grantor/Will writer should review the agreements to make sure that the designations of such agreements correspond to the wishes of the Grantor/Will writer as set forth in the Will, Living Trust, or Joint Living Trust.

A Living Trust (also known as a "revocable trust") is a trust created by a person (known as the "Grantor") for use during that person's lifetime. It provides for payments of income for the Grantor and the distribution of the remaining assets of the Trust upon the Grantor's death. The Living Trust also includes an option which allows the Grantor to amend or revoke the Trust at any time. In order to amend the Trust, the Grantor must deliver to the Trustee an appropriate written amendment/restatement, signed by the Grantor, that restates the prior Trust to incorporate the desired changes. Typically, a Living Trust includes provisions that allow the Grantor, who often serves as Trustee, to manage the assets of the Trust until such time as the Grantor: (i) becomes "disabled" (unable to manage his or her financial affairs) or (ii) simply prefers to have someone else (perhaps a bank's trust department) manage his or her affairs. If that occurs, the trust provisions provide for a successor Trustee to take over the management of the Trust. (NOTE: In New York, the Grantor may not serve as Trustee.)

Payments
During the Grantor's lifetime, payments of the net income of the Trust are made to the Grantor at fixed intervals. The amount of the payments can be changed from time to time at the request of the Grantor.

When the Grantor dies, the Trust provisions designate the beneficiaries who will receive the Grantor's property, much in the same manner as a will. At the option of the Grantor, these provisions include specific distributions, distributions of tangible personal property, and distributions of the remaining trust assets. The successor Trustee carries out these provisions in a role similar to that of an Executor. These provisions also allow the Grantor to include a trust share that will be maintained for the benefit of the Grantor's minor children through a Advantages of a Living Trust
The Living Trust is often viewed as a preferable alternative to the Will. Some of the perceived advantages of the Living Trust relate to privacy, reduced probate costs, and management of assets. For more information regarding these advantages, see the Living Trust Advantages topic.

Factors to Consider in Creating a Living Trust
There are several important factors that must be considered in creating and using a Living Trust.

1. USE OF THIS WORKSHEET AS A PLANNING DEVICE. Creating a Living Trust involves careful planning and consideration. Not all of the steps, including the very important step of transferring assets, can be completed while sitting at a computer. Although this worksheet will guide you through the process of creating a valid Living Trust document, it may be appropriate to contact a lawyer regarding legal questions. In fact, it is expected that many people will use the Living Trust document as a planning tool, especially if there are special circumstances or if the estate may exceed $5,000,000 at the Grantor's death. If that is the case, then after using this interview to draft an initial document and as an educational device, the user may wish should finalize the Living Trust document with the aid of legal counsel.

2. TRANSFER OF ASSETS INTO THE TRUST. In addition to creating and signing the Living Trust document, assets must be transferred into the trust. A Living Trust only applies to the assets that are actually transferred into the Trust. For additional information on this very important point, read the Funding the Trust topic.

3. POUR-OVER WILL. The use of a Living Trust does not eliminate the need for a will. A Grantor may have assets that he or she does not wish to transfer into the Living Trust. For example, it may be preferable not to transfer some personal property such as vehicles, household and personal effects, and a personal checking account. A Pour-Over Will serves to handle the distribution of such assets by directing that such assets be transferred to the Trustee of the Living Trust for final distribution. It is highly recommended that a Living Trust not be signed unless a Pour-Over Will is also properly signed by the Grantor.

4. TAX CONSEQUENCES. Generally, the income earned by the assets transferred into a Living Trust will be taxable to the Grantor on his or her personal income tax returns in the same manner as if the assets continued to be held personally by the Grantor during his or her lifetime.

5. ESTATE PLANNING. The estimated value of your assets, minus the estimated value of your liabilities is critical information in planning your estate. A high value -- more than $5,000,000 in value at your death) -- suggests that more complex estate planning techniques may be required to minimize federal estate taxes.

6. FEDERAL ESTATE TAX. The 2010 Tax Act brought renewed the federal estate tax, but at much higher exclusion amount (the amount each person can transfer in total during life and at death without paying transfer tax) than previously and decreased the top marginal tax rate. For 2011, the estate tax exclusion amount is $5 million with a top tax rate of 35%. The exclusion amount will be adjusted for inflation in 2012.

7. JOINT LIVING TRUST. For married couples desiring the advantages of a Living Trust, another alternative is to create a Joint Living Trust. For additional information, read the topic Joint Living Trust.

The Living Trust or Joint Living Trust are often viewed as preferable alternatives to the Will. Some of the perceived advantages of the Living Trusts are as follows:

1. PRIVACY. A Living Trust is more private. Under state law, a will is admitted to probate after the Will writer dies, so that the terms of the will can be administered. As a result, the will becomes part of the court records that can be inspected by the public upon request. On the other hand, a Living Trust is administered by the Successor Trustee, without court involvement, and normally does not become a public record. Thus, the terms of the Living Trust, including the identities of the beneficiaries and the manner in which the Grantor's assets will be distributed, remain private knowledge.

2. REDUCED PROBATE COSTS. A Living Trust may avoid at least some of the perceived "evils" of the probate process. A Will is subject to a court administered process known as "probate." The probate process includes procedures that: (i) determine the validity of the Will, (ii) deal with potential Will challenges, (iii) resolve the claims of creditors of the Will writer, and (iv) ultimately distribute the Will writer's assets to the beneficiaries. This process takes time (generally, six months to three years), and involves court costs, executor fees, and lawyer fees. The cost of probate can vary greatly, depending on state law; the cost may range from 2% of the amount of the Will writer's gross assets to 10% or more in some states. However, the costs associated with administering the trust assets after a Grantor's death, including the obligation to prepare various tax returns, account for trust assets, pay the Grantor's debts, and make required distributions, may be similar in amount to the costs of probate. Therefore, it is difficult to predict whether the amount of savings that might result from the use of a Living Trust will be more than a minimal amount.

3. MANAGEMENT OF PROPERTY. A Living Trust offers a mechanism for allowing another person or entity to manage all or some of your assets if you become unable to do so, or if you simply prefer to "have someone else do it." Thus, a Living Trust may serve as an alternative to a conservatorship or guardianship.

Enter the values of any other assets that you may own that did not seem to fit well under any of the prior categories.

Enter the current unpaid balance on any other loans or debts that you may have. This category may include education loans or a loan received from a relative. Use the balances from your most recent statements, or obtain more current balances through direct contact (e.g., phone or Internet access) with the lender.

Include the fair market value of any other real estate that you own. Such real estate could include a time share condominium, a vacant lot, forest reserve acres, farmland, or rental property. If you own such real estate jointly with one or more other persons, include only the value of your share. Base your valuation amount on "fair market value," the amount for which the real estate could be sold to a neutral third party. The amount that you paid for the real estate may be relevant in helping you decide the price at which you could sell the real estate to a third party, but you should also take into consideration any other factors (including the mere passage of time) that might influence the value.

Valuations provided by local real estate taxing authorities may be somewhat helpful, but in many jurisdictions, the valuation for real estate tax purposes is not actually fair market value even though it may carry the label of "true value" or "full value."

The preparation of a will for you requires your basic information. In addition to the usual "name and address" questions, it is necessary to know whether you have children. For example, a prior marriage may have resulted in financial obligations to support children or a former spouse. Generally, children are high on the list of priorities, but even if they are not, there may be state laws which provide certain rights in favor of a spouse and the children regardless of what you may attempt to dictate in your will. There may be unique information about children that should be disclosed so that adequate plans can be made. For example, a handicapped child may have special needs; special planning may be required to best take advantage of government funding that may be available.

Include the value of vehicles, jewelry, household furnishings, and personal effects. For vehicles, the "blue book" value can be obtained by contacting a dealer, or you can obtain a reasonable estimate by checking the prices of comparable vehicles listed for sale in your local newspaper. For other personal property items, be sure to use the value that could be obtained if such items were sold. Sometimes the only reasonable value is your best guess as to what the items would bring at a garage sale, an amount that might be considerably less than the value of the items to you. A reasonable estimate is acceptable.

Include the value of your personal residence. If you own it jointly with one or more other persons, include only the value of your share. Base your valuation amount on "fair market value," the amount for which you could sell the residence to a neutral third party. The amount that you paid for the residence may be relevant in helping you decide the price at which you could sell the residence to a third party, but you should also take into consideration any other factors (including the mere passage of time) that might influence the value.

Valuations provided by your local real estate taxing authority may be somewhat helpful, but in many jurisdictions, the valuation for real estate tax purposes is not actually fair market value even though it may carry the label of "true value" or "full value."

If you own more than one personal residence (perhaps a vacation home), be sure to also include the value of that residence.

Enter the current unpaid balance on any mortgages, deeds of trust, or similar loan obligations that are liens on your home. This category includes home equity loans. Use the balances from your most recent statements, or obtain more current balances through direct contact (e.g., phone or Internet access) with the institution or other lender.

A Pour-Over Will is a specialized will that is used as a supplementary document to the Living Trust. Its primary function is to "pour over" the Will writer's remaining assets (at the Will writer's death) into the Will writer's Living Trust.

A Pour-Over Will includes a standard provision that provides for an Executor (Personal Representative in some states). It also includes an optional provision to select a Guardian, if the Will writer has minor children. Instead of the usual provisions that provide for the distribution of specific distributions, tangible personal property, and the residuary estate, the Pour-Over Will simply distributes the Will writer's remaining assets to his or her Living Trust. The Living Trust then distributes the remaining property, plus the Trust assets, in accordance with the distribution provisions of the Living Trust.

The Pour-Over Will must be signed with the same formalities as the Will.

The Living Trust, Joint Living Trust, and the Will documents include a provision for the protection of the beneficiaries of the Trust, if a Children's Trust is created. The purpose of this provision is to prevent the Beneficiaries from impoverishing themselves by "selling" or "assigning" their interests in the trust to third parties. For example, a 19-year-old child might be tempted to "sell" or "trade" all or a portion of his or her interest in a trust for an expensive sports car. This provision does not prevent the 19-year-old from making a deal with the car dealer, but it does prevent the car dealer from enforcing the deal against the Trust. Sometimes these provisions are known as "spendthrift" provisions.

Include the current values of any IRA accounts, 401k plan, pension plan accounts, or other similar retirement assets that you may own. However, if for a specific account your right to payments or benefits terminates at your death, and if there are no benefits for your survivors, do not include any value for that particular account.

1. The Estate Planning Worksheet is not a legal document and does not require any signature, witnesses, or notarization. If the total value of the net estate is expected to be less than $5,000,000, the Worksheet can now be used to prepare a Will, Living Trust (and a Pour-Over Will), or Joint Living Trust (and a Pour-Over Will). If the net estate is expected to exceed $5,000,000, the Worksheet can be provided to an estate planning lawyer who will review this information for use in preparing an estate plan.

2. If the person completing the Worksheet is married, it is necessary for each spouse to fill out a separate Worksheet. Each worksheet should describe all of the property in which that person holds an interest, as well as the type of interest held. Each spouse should also state his or her own intentions for their children, if any, because those intentions may differ from those of the other spouse.

A specific bequest is a gift (bequest) of cash or a specific item to a named person or organization. For example, a wedding ring, $1,000, an antique, or a car. The gift can be made in a Will, a Living Trust, or a Joint Living Trust. Some persons (Will writers or Grantors) have specific items that they want to give to a specific person or organization. For example, a mother may want to make sure that her jewelry goes to her daughter, or grandparents may decide that they would like to give $1,000 to each of their five grandchildren. Specific bequests are usually made at the beginning of the Will, followed by other provisions that provide for the distribution of the other assets of the estate (the "residuary estate").

A specific bequest may be an item of tangible personal property (for example, a diamond ring), an item of intangible personal property (for example, 50 shares of IBM stock), or real property (for example, a personal residence).

Many states "protect" spouses with laws that permit a spouse to receive a portion of the estate even though the Will does not provide for the spouse. If the intent in the Will is to "disinherit" the Will writer's spouse, you may want to consult with an attorney regarding the legal rights of the Will writer's spouse to receive property from the estate, despite the provisions of the Will. Disinheriting means to deprive another person (an heir or spouse) of property that would have been distributed to that person under the laws of intestacy (dying without a valid Will). An agreement between the Will writer and the spouse, signed prior to their marriage, may permit the spouse not to be included in the Will.

A similar issue is raised if a Grantor/Will writer plans not to include a spouse in either the Living Trust, Joint Living Trust, and/or the Pour-Over Will. If these documents are being used as an alternative to the Will, and if the spouse will not be included, it is advisable to consult with an attorney.

Tangible personal property includes jewelry, furniture, cars, and other items that have a physical essence. Intangible personal property includes cash accounts, stocks, bonds, and other similar assets that are non-physical. A coin is tangible personal property, while 25 cents in a checking account is intangible personal property.

Tangible personal property can be given in a Will, a Living Trust, or a Joint Living Trust. Some persons (Will writers and Grantors) want to make sure that their tangible personal property is given to a specific person or divided among several specific people. The documents on this site allow the user to specifically give all of the (remaining) tangible personal property to specific beneficiaries, after the user has first decided whether to make specific bequests. It is not required that the user include specific bequests, but if the user does so, the Will, Living Trust, or Joint Living Trust will then exclude any specific bequests of tangible personal property from the provisions that later distribute the remaining tangible personal property. For example, if a Will writer makes a specific bequest of a "1957 Chevy" to "Uncle Stan," the language of the Will automatically excludes the "1957 Chevy" from the Will writer's later provision that distributes the remaining tangible personal property to "Aunt Angela." This language is necessary because the "1957 Chevy" would otherwise be distributed as a specific bequest to one person and as part of the tangible personal property to a different beneficiary.

If the terms of the Will (or Living Trust or Joint Living Trust) provide that the tangible personal property will be distributed to more than one beneficiary, the Executor (or the Trustee in the case of a Living Trust or Joint Living Trust) is responsible for determining how the property should be divided. In most cases, the Executor (or Trustee) will carry out this task by carefully considering the wishes of the beneficiaries who will be receiving the property.

The Wills, Pour-Over Will, Living Trust, and Joint Living Trust include provisions that grant broad powers to the Executor and Trustee to carry out the terms of the Will and Trust. In the Wills, the listing of powers is short and concise if the Will does not include a children's trust. The Pour-Over Will includes a simple provision. If the Will contains a children's trust, and in the case of a Living Trust or Joint Living Trust, the Executor and Trustee powers are more detailed and specific. Further, in these situations, some optional powers are available so that the user can add powers that may be useful to the user's particular situation. For example, a Will writer who owns a business may choose to include a power that permits the Executor and/or Trustee to continue to operate the Will writer's business (at least for a short period of time) after the Will writer's death. In other situations, this power may be irrelevant or undesirable.

In addition to the standard powers given to the Trustee, it is often desirable to provide the Trustee with specific, additional powers:

Hold Assets as a Single Fund
If the Trust is being maintained for the benefit of more than one beneficiary, each of which is entitled to a specific share of the Trust, the Trustee will have to keep careful records of each beneficiary's share. Each such share typically earns income and pays its proportionate share of the Trust expenses. The optional power to hold trust assets as a single fund allows the Trustee to maintain a single fund for joint investment and management purposes of the entire Trust, without the need for physical segregation of each beneficiary's share. For example, one brokerage account and one bank account could be used by the Trust instead of multiple accounts, one such account for each beneficiary. Instead of establishing multiple accounts with brokers and banks, it is the Trustee who keeps a careful accounting of the trust shares. The Trustee allocates to each beneficiary's share a proportionate share of the trust's total income and expenses, and subtracts from each beneficiary's share the payments and distributions made to the beneficiary. Allowing the Trustee to hold assets as a single fund often reduces the expense of operating the Trust.

Compensation
If a bank's trust department or other institution is selected as the Trustee, it is usually understood that the Trustee will charge a fee for its services. However, if a family member or friend is chosen, there may be some dispute whether the Grantor intended for that individual Trustee to receive compensation for his or her services. This optional power clarifies the Grantor's intent by stating that the Trustee is entitled to reasonable compensation for his or her services, and is entitled to reimbursement for the Trustee's out-of-pocket expenses incurred by the Trustee in the performance of the Trustee's duties.

Loans to Beneficiaries
Occasionally, the Trustee may consider it appropriate to make loans of Trust assets to a beneficiary. For example, the beneficiary may be ready to purchase a home or a business and could greatly benefit from a Trust distribution, but is not scheduled to receive such a distribution from the Trust for another year or two. By including this optional power, the Trustee has the flexibility to advance funds, in unusual circumstances, to a beneficiary before that beneficiary would otherwise receive those funds. The advance would be in the form of a loan which the beneficiary is obligated to repay with interest. However, the Trustee may allow the beneficiary to repay the loan using money that the beneficiary would otherwise receive from the Trust.

Methods of Distribution
The language of a Trust typically provides for payments and distributions of trust assets "to," or "for the benefit of," a beneficiary. However, it is often useful to clarify the Grantor's intent that the Trustee is authorized to make payments directly to others who are providing something of value to the beneficiary. The most common example is that the Trustee can make a payment directly to a college to cover a child's tuition. By including specific authority in the Trust for the Trustee to make such payments to others, the Trustee is better protected against claims that required payments to a beneficiary were never received by that beneficiary.

A sole trustee serves alone. Alternatively, you can nominate two or more persons (or institutions) to serve together as co-trustees. Decisions of co-trustees need to be unanimous, and therefore, the co-trustees need to be able to work together.

A good choice in many situations is to have an individual and a bank serve together as co-trustees. One co-trustee can be a family member who is close to the children and knows their needs, perhaps an aunt or uncle of the children. The other co-trustee can be a bank trust department with a better background for handling investments, preparing tax returns, and providing accountings.

When selecting a trustee for the children's trust it is recommended that you NOT choose one of the children even if that child is of adult age, because doing so can lead to conflicts among the children regarding distributions. Further, it is usually preferable NOT to choose more than two co-trustees.

If you choose an individual and a bank as your first choice, in many situations, an appropriate alternate choice is to select the same bank with a different individual.

A Standard Will is a document under which a Will writer states his or her intentions regarding the persons or organizations ("Beneficiaries") who will receive the Will writer's property, the person or organization ("Executor") who will carry out the Will writer's wishes, and if necessary, the person ("Guardian") who will care for the Will writer's minor children.

NOTE: This site provides an appropriate Will for most people. However, if the estate is expected to be larger than $5,000,000 at death, including life insurance proceeds, it may be desirable to use more complex estate planning techniques that are not provided by this will. For such cases, the Estate Planning Worksheet can be used to prepare for an office conference with a lawyer who can assist you with the preparation of a more complex will.

NOTE: A separate will should be created for each person. Even for married couples, a "joint will" is not recommended.

This site provides various estate planning documents. The Estate Planning Worksheet is a worksheet that helps gather the personal, financial, and family information that is needed to prepare a will. The Standard Will is a will that can be used for estates expected to be less than $5,000,000 to distribute property at death, name an executor, and if necessary, nominate a guardian and establish a trust to care for minor children. The Codicil to Will makes minor changes to an existing will. As an alternative to using the Wills, the Living Trust or the Joint Living Trust can be used in conjunction with the Pour-Over Will to achieve many of the same objectives. The Living Trust and Joint Living Trust are "revocable," that is these documents can be amended or revoked at a later time. Some types of trusts are "irrevocable," for example, more complex life insurance trusts and charitable trusts, but those types of trusts are not offered by this site.

There are many types of wills and trusts. Several different will and trust documents are available: The Standard Will (includes an optional children's trust), Married with No Children Will, Single with No Children Will, Parent with Minor Children Will, Parent with Adult Children Will, Remarried with Minor Children Will, Remarried with Adult Children Will, Codicil to Will, Living Trust, Joint Living Trust, Pour-Over Will, and Living Will. Also available are several planning documents: Estate Planning Worksheet, Memorial Services, and Personal Fact Sheet.

Standard Will
This Will includes provisions for a wide variety of individual needs. However, other wills offered are streamlined to save you time by eliminating provisions that do not apply to you.

Married with No Children
This Will is appropriate if you have a spouse but no children and do not intend to have children.

Single with No Children
This Will is useful if you are single and have no children and do not intend to have children.

Parent with Minor Children
This Will is useful for a single or married person with minor children. It includes the necessary provisions for minor children, and continues to be appropriate even after the minor children become adults.

Parent with Adult Children
This Will is appropriate for a single or married person with adult children. This document does not include any provisions necessary for minor children.

Remarried with Minor Children
This Will can be used if you are remarried and want to provide for minor children from a prior marriage. It can also provide for minor children from your current marriage. It includes the necessary provisions for minor children and continues to be appropriate even after the minor children become adults.

Remarried with Adult Children
This Will can be used if you are remarried and want to provide for adult children from a prior marriage. It can also provide for adult children from your current marriage. This document does not include the necessary provisions for minor children.

Codicil to Will
This document is used to change one or more provisions of a will, as an alternative to creating a new one.

Living Trust
This document is created to manage a person's assets during his or her lifetime, to provide for payments of income and principal, and to distribute the assets upon his or her death in a manner similar to a will.

Joint Living Trust
This document is created to manage a couple's assets during their joint lifetime, to provide for payments of income and principal, and to distribute their assets upon their deaths in a manner similar to a will.

Pour-Over Will
This is a specialized will that is used as a supplementary document to the Living Trust or Joint Living Trust. Its primary function is to "pour over" the Will writer's remaining assets (at the Will writer's death) into the Will writer's Living Trust or Joint Living Trust.

Estate Planning Worksheet
This worksheet helps gather the personal, financial, and family information that is needed to prepare a will. It also helps explain the alternatives for distributing estate assets to beneficiaries.

Living Will
This is a document under which a competent adult, prior to becoming unconscious or incompetent, declares his/her intentions regarding the withholding or withdrawal of life-sustaining procedures under certain circumstances.

Memorial Services
This worksheet provides an opportunity to state personal wishes regarding funeral or memorial services, including preferences regarding a choice of funeral home, burial versus cremation, flowers, speakers, music, and obituary notices.

Personal Fact Sheet
This worksheet can be used to organize personal and financial information, including summary information regarding names and addresses, assets and liabilities, insurance policies, advance health care directives, and wills.

You should include the categories of assets and liabilities that apply to you. The worksheet will be customized to include only questions about those particular categories. The next dialogs will allow you to describe and value specific assets (or liabilities) within the particular categories that you have selected.

In general, each asset should be valued at "fair market value," the amount for which you could sell the asset to a neutral third party. The amount that you paid for an asset may be relevant in deciding fair market value, but cost is not the determining factor.

Keep in mind that you are entering estimated values. It is not necessary to spend a lot of time trying to eliminate minor differences between your best estimate and the actual fair market value.

Note: When entering values for property that you own jointly with another person, enter only the value of your share of the property.