Learn how to avoid the seven major mistakes families make when choosing an estate planning attorney.

Estate Planning

Estate Planning is the working process of anticipating and arranging, while you are living, for

the management and disposal of your estate during your life and after your death.

  • It is a working process
  • It is taking control of managing and arranging your estate
  • It provides you protection during your lifetime
  • It provides for your loved ones upon your death
  •  

Why everyone needs an Estate Plan?

  • Incapacity planning
  • Manage your final arrangements
  • Avoid probate process
  • Provide care for your loved ones in the manner you feel appropriate
  • Minimize gift, Estate, Generation Skipping Transfer, and Income Tax

Why you may want to avoid probate?

Public Record

Once a will is filed with the probate court, it becomes public document and is open for public inspection. Anyone who is interested in the will can obtain a copy by visiting the right probate court or order a copy of the will via phone, fax, mail or internet

Money

Section 473.153.3 of the Missouri Revised Statutes provides that attorneys performing services

for the estate shall receive compensation based upon the following table:

On the first ……………………………………………………… $5,000             5%

On the next………………………………………………………. $20,000           4%

On the next………………………………………………………. $75,000           3%

On the next………………………………………………………. $300,000         2.75%

On the next………………………………………………………. $600,000         2.5%

On all over……………………………………………………….. $1,000,000      2%

 

For an estate valued at $150,000 (including life insurance, real estate, annuities, and retirement), the statutory attorney’s fee would be approximately $4,500; for an estate valued at $500,000, the statutory attorney’s fee would be approximately $14,000. This statutory fee does not change no matter how much or how little work is required in administering the estate.

Time

The minimum mandatory period of administration of the estate is six (6) months and twenty (20) days in Missouri as it must be kept open for creditors to make claims. Realistically, it takes at least 12 to 18 months to close a probate administration. greatly limits the funds your loved ones can access during this time frame.

What if you don’t have an Estate Plan?

THE STATE OF MISSOURI PROVIDES ONE FOR YOU

When a decedent dies intestate, Missouri Intestacy Succession Law applies.

After the payment of claims, the surviving spouse shall receive:

  • The entire estate if there are no surviving descendants of the person who died
  • The first $20,000 plus ½ of the estate if there are surviving descendants who are all descendants of the surviving spouse
  • ½ of the estate if there are surviving descendants one or more of which are not descendants of the surviving spouse

Therefore, your spouse likely does not inherit your entire estate if you die without an estate plan in place. Furthermore, if you have minor children, a conservatorship is likely going to be necessary whereby the Court maintains control of the proceeds until the children attain 18 year of age.

As you can see, the surviving spouse can often be left sharing the estate with the children, parents, or siblings of the decedent. This is rarely what the decedent would have wished. By preparing a simple estate plan, the decedent could have eliminated these problems and kept harmony among family members.

How does a Will work?

A Will takes effect only upon the death of the Testator (the person making the Will) and has to go through probate.  It does not provide for circumstances where the Testator is incapacitated or disabled.

When the Testator dies, the Will must be filed with the Probate Court in the County where the Testator resided.  Once filed, it becomes a public record.  Anyone can go to the Courthouse or log onto the Courts’ system and learn the value of the estate, as well as the heirs who will inherit the estate. 

How does a Trust work?

Trusts are a good vehicle for those who wish to save money, time, and the publicity of probate.

A Trust takes effect not only upon the Grantor’s death but also upon the incapacity or disability of the Grantor (the person making the Trust).  Unlike with a Will, the successor Trustee can take charge of and administer the assets immediately upon the Grantor’s death or disability, avoiding the long wait time often associated with probate.

The Trust is a private document.  It does not have to be filed with any Court, agency, body, or person.  The contents of the Trust are only available to a narrow class of persons directly related to the Trust.  Generally speaking, Court approval is not required in order for the Trustee to act.

A Trust can generally be set up for a flat fee which is often as little as 1/10th the cost of administering a probate estate.  Once established, the cost of administering a Trust is relatively minor compared to that of administering a probate estate.  Over the long term, the cost of a Trust is a fraction of that of a Will or of having no estate documents in place at all.

 

Myths We Tell Ourselves About Estate Planning

 

Estate planning can be a very difficult process. While it’s not brain surgery, making the decision to move forward with the planning requires us to face the fact that we will not live forever. This thought can stop many people right in their tracks. Others talk themselves out of seeing a qualified attorney to put together an estate plan based on some of the following common myths:

Myth #1: Only the Rich Need Estate Planning

When we hear about estate planning on the news or read about it on the internet, it is usually in regards to a wealthy businessman or celebrity who made some error, did no planning, or has family members who are angry about the planning that was actually done. The topic catches people’s attention: Rich people have so much that surely they need planning and can afford to have the planning done correctly. By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not  have anything close to Bill Gates’ billions. However, this could not be further from the truth. Estate planning is about more than just the money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone has to make decisions on your behalf–a far more likely scenario. If you have not done any planning, the court will have to appoint someone to make your medical and financial decisions for you. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made. Even for those of modest means, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what—and many times, what the government’s best guess as to what you would want is contrary to what you actually want. But, because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.

Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything

For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In most cases, this is the desired outcome for married individuals. However, this approach can be dangerous. While it is convenient for assets to pass automatically to the surviving spouse, this outright distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.

Additionally, what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or the next generation. Your spouse’s new spouse could go out and buy a sports car with the money you intended to pass to your children. With blended families being common today, this is a real concern for many people. Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.

Myth #3: A Will Avoids Probate

Many people believe that once they have created a will—whether drafted by an experienced attorney, or using a DIY solution or online form—they have avoided probate. Unfortunately, they are wrong.

While a will is a great way to designate a person to wind up your affairs once you have passed, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property. The level of involvement by the probate court can vary depending on the circumstances, but this process is not private, as the will becomes a matter of public record.

Time

The minimum mandatory period of administration of the estate is six (6) months and twenty (20) days in Missouri as it must be kept open for creditors to make claims. Realistically, it takes at least 12 to 18 months to close a probate administration. greatly limits the funds your loved ones can access during this time frame.

What if you don’t have an Estate Plan?

THE STATE OF MISSOURI PROVIDES ONE FOR YOU

When a decedent dies intestate, Missouri Intestacy Succession Law applies.

After the payment of claims, the surviving spouse shall receive:

  • The entire estate if there are no surviving descendants of the person who died
  • The first $20,000 plus ½ of the estate if there are surviving descendants who are all descendants of the surviving spouse
  • ½ of the estate if there are surviving descendants one or more of which are not descendants of the surviving spouse

Therefore, your spouse likely does not inherit your entire estate if you die without an estate plan in place. Furthermore, if you have minor children, a conservatorship is likely going to be necessary whereby the Court maintains control of the proceeds until the children attain 18 year of age.

As you can see, the surviving spouse can often be left sharing the estate with the children, parents, or siblings of the decedent. This is rarely what the decedent would have wished. By preparing a simple estate plan, the decedent could have eliminated these problems and kept harmony among family members.

How does a Will work?

A Will takes effect only upon the death of the Testator (the person making the Will) and has to go through probate.  It does not provide for circumstances where the Testator is incapacitated or disabled.

When the Testator dies, the Will must be filed with the Probate Court in the County where the Testator resided.  Once filed, it becomes a public record.  Anyone can go to the Courthouse or log onto the Courts’ system and learn the value of the estate, as well as the heirs who will inherit the estate. 

How does a Trust work?

Trusts are a good vehicle for those who wish to save money, time, and the publicity of probate.

A Trust takes effect not only upon the Grantor’s death but also upon the incapacity or disability of the Grantor (the person making the Trust).  Unlike with a Will, the successor Trustee can take charge of and administer the assets immediately upon the Grantor’s death or disability, avoiding the long wait time often associated with probate.

The Trust is a private document.  It does not have to be filed with any Court, agency, body, or person.  The contents of the Trust are only available to a narrow class of persons directly related to the Trust.  Generally speaking, Court approval is not required in order for the Trustee to act.

A Trust can generally be set up for a flat fee which is often as little as 1/10th the cost of administering a probate estate.  Once established, the cost of administering a Trust is relatively minor compared to that of administering a probate estate.  Over the long term, the cost of a Trust is a fraction of that of a Will or of having no estate documents in place at all.

 

Myths We Tell Ourselves About Estate Planning

 

Estate planning can be a very difficult process. While it’s not brain surgery, making the decision to move forward with the planning requires us to face the fact that we will not live forever. This thought can stop many people right in their tracks. Others talk themselves out of seeing a qualified attorney to put together an estate plan based on some of the following common myths:

Myth #1: Only the Rich Need Estate Planning

When we hear about estate planning on the news or read about it on the internet, it is usually in regards to a wealthy businessman or celebrity who made some error, did no planning, or has family members who are angry about the planning that was actually done. The topic catches people’s attention: Rich people have so much that surely they need planning and can afford to have the planning done correctly. By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not  have anything close to Bill Gates’ billions. However, this could not be further from the truth. Estate planning is about more than just the money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone has to make decisions on your behalf–a far more likely scenario. If you have not done any planning, the court will have to appoint someone to make your medical and financial decisions for you. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made. Even for those of modest means, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what—and many times, what the government’s best guess as to what you would want is contrary to what you actually want. But, because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.

Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything

For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In most cases, this is the desired outcome for married individuals. However, this approach can be dangerous. While it is convenient for assets to pass automatically to the surviving spouse, this outright distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.

Additionally, what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or the next generation. Your spouse’s new spouse could go out and buy a sports car with the money you intended to pass to your children. With blended families being common today, this is a real concern for many people. Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.

Myth #3: A Will Avoids Probate

Many people believe that once they have created a will—whether drafted by an experienced attorney, or using a DIY solution or online form—they have avoided probate. Unfortunately, they are wrong.

While a will is a great way to designate a person to wind up your affairs once you have passed, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property. The level of involvement by the probate court can vary depending on the circumstances, but this process is not private, as the will becomes a matter of public record.