In addition to the savings in state estate taxes in estates (See Part I) where a couple has assets that total more than a million dollars, including their home, their life insurance, and their retirement assets, if a couple either has no estate plan at all, or has a simple will based estate plan, there may be other costs after the death of a spouse that could be avoided with a proper estate plan.
This is true even if the value of the estate is far lower than the estate tax threshold.
If there is no estate plan at all, the court is likely to require a bond when the estate is probated. This bond may well cost more than the cost of a good estate and incapacity plan. The bond will almost certainly exceed the cost of a simple will.
In addition, if one is comparing a trust and a probate (i.e. if one is comparing a trust based plan versus a will based plan), the cost of the probate that is done after the person dies is likely to be several times the cost of the entire estate and incapacity plan that is based on a trust. Although a pour over will is part of a trust based plan, generally one can avoid a probate (and the cost of a probate) if one has a trust based estate plan, if one has properly transferred all of their assets that do not pass by pay on death designations to their trust.
If one attempts to avoid taxes by giving money or assets such as a house to children during life, in addition, to the Medicaid consequences outlined in Part I of this two part article, there is the chance that the child could lose (or take) the money or asset.
People, of course, say that *their* children would never take advantage of them. However, there are cases where children have evicted their parents from the parents’ home after the parents transferred title of the home to the child. There are also cases where the parents transferred substantially all of their assets to a child, who then suffered a liver failure or the like, and, being without insurance, then lost everything to the cost of health care.
Steven A. Heinrich
Divorce & Custody
Wills, Guardians & Elder Law
- Wills, Trusts, and Probates
- Guardians and Conservators
- Elder Law
- When Should You See An Elder Law Attorney
- Substitute Decision Makers
- Overview of Guardianships, Trusts, and Health Care Documents
- Finances and Business
- Health Care Documents
- Guardianships and Conservatorships