In advanced estate planning, our key focuses are (1) identifying and minimizing the risk of disputes, and (2) providing our clients’ beneficiaries post-death asset protection planning and tax planning. As the complexity of an estate increases, so does the potential of costly disputes, unexpected (avoidable) taxes, and the risk of assets being lost to third parties after our clients’ deaths.

But, indeed, anyone can draft a will or provide a sophisticated form service that creates a basic will or trust without the unauthorized practice of law, that is, the application of several areas of legal expertise to a client’s specific facts and circumstances. One online resource we have found better than others and have even consulted for is www.trustandwill.com. But even they provide the disclaimer that they are ultimately a form providing service, not a law firm.

The total value of your estate is not the key determinant of how complex your estate will be to administer.

Rather, it is the kinds of assets you have and how they are titled (i.e., the name(s) in which they are owned legally or “technically”); where they are held (i.e., country, state, county); what process is required to change titled ownership to that asset; and (lastly, yes) the total “fair market value” of your entire estate worldwide.

For example, a person could have given away all her tangible personal property and sold all other assets, live in a retirement home, but have a $100 million brokerage account. If she had one child who also had only one child, she could (in theory) leave her entire estate by a transfer on death agreement or beneficiary designation, entirely avoiding probate or trust administration. That truly would be a “simple” estate plan. Even though the estate would be taxable, the estate tax return would be as simple as that return could be, and a large check payable to the IRS and sent with the return would effectively resolve the entire estate administration.

Another person could have $500 in a bank account, several used cars worth $12,000 total, five $100 US savings bonds, a small taxable retirement account (IRA) with $13,000 in it, and a home worth $100,000 with a $5,000 outstanding mortgage balance. If he had two or more children to leave his $125,000 estate to, the complexity of his estate administration would be far greater than the $100 millionaire’s above. A probate would be unavoidable, for example, to manage the mortgage and convey title to the real property, whereas the multi-millionaire avoided probate.

Additionally, some find that even with a small estate, estate planning is worth the cost because of family dynamics and personal circumstances. Some examples of situations that often warrant estate planning are the desire to disinherit an heir-at-law, nominating a guardian to care for minor children if a parent dies unexpectedly, or wishing to gift a certain item or items to a beneficiary at death (instead of an equal share of the item(s) among all beneficiaries).

No matter how simple or complicated one person’s will, trust, or situation is or was, it quite honestly has nearly zero relevance to how complicated another person’s will, trust, or situation is or is going to be.

Most people seem to recommend reviewing your plan with your attorney every 3 to 5 years and immediately upon any major life event that you intuitively know might change things, such as a child’s divorce or a premature death or a significant change in net worth.

These are reasonable guidelines — if you abide them.

The only effective alternative is to pay an estate planning law firm that provides clients an annual “maintenance plan” (we call it our “Annual Review” program), so that you know the law firm’s set process will “push” questions to you each year and schedule a call or video meeting to review your answers and your assets.

You can read about our two Annual Review program options here.

When an individual dies without a will, or “intestate,” the administration and distribution of their estate is subject to the laws of the state in which they resided at death, except that real property (land, homes, etc.) will be administered according to the laws of the state in which it is located. (“Personal property” is all property that is not “real property” or “real estate.”)

This is one way in which intestacy (or even will-based plans) can lead to multiple probates or administrations after a person’s death: real property that is not properly titled to a trust is usually unavoidably subject to court-based probate or administration (sometimes called “ancillary” or “foreign” probate) in the county and state where the property is located.

This can be extremely frustrating to loved ones, and is one of the key causes of Americans’ dislike of “probates” generally. It causes costs to double and triple quickly, and can be very stressful to surviving beneficiaries.

Click here to read about the differences among intestacy, probate, and trust administration. 

A will is a document with no legal effect until the moment of death, at which point it is subject to being “proved” (or “probated”) in court, so that it can be administered.

A trust is a contract. It has legal effect immediately upon being signed. It has three parties: the grantor who places his/her/their assets into the trust; the trustee who manages the assets in the trust according to the trust agreement; and the beneficiaries who benefit from the assets in the trust.

Wills are ancient legal documents, executed (and amended) only formally, generally requiring two witnesses and other formalities not required of contracts. Trusts are executed (and amended) like contracts, with signatures (and, ideally, acknowledgement before a notary public), but not witnesses or other formalities required of wills.

The key, however, to trust-based planning is sadly lost upon a large percentage of parties who form trusts because trusts do not avoid probate unless all assets subject to probate are retitled to the trust during the grantor’s lifetime.

This is called “trust funding,” and some refer to it as going through probate during lifetime. This is because in the course of funding a trust, a grantor has opportunity to review and confirm lots of important (but sometimes tedious) details about certain assets. For example, real property can be scrutinized to ensure the “chain of title” is clear and does not have undiscovered “clouds” on title from past quitclaim deeds or gift deeds or unusual conveyances done improperly.

Trust funding is one of the premier benefits of trust-based planning for clients whose wishes include “cleaning things up” so that administration is as easy as possible for their loved ones later on.

Why? The answer is very practical: if an asset can easily be retitled to trust — or at least any problems identified and solved — during lifetime trust funding, then the asset can easily be retained in trust (to protect a vulnerable loved one) or retitled from the trust to a beneficiary once post-death administration is complete and assets are ready to be distributed.