The purpose of estate planning is to safeguard you and your loved ones. When there is a loved one who may need additional support after your death, this can be a challenging task. You may wish to give this person as much as possible, but you may not wish to do so at the price of others you care about. A right of occupation trust can help you arrange for this circumstance in terms of property ownership and use.

What is a right of occupancy trust?

Through a right of occupancy trust, you can give someone the right to live at your home or another real estate until they die or move out, or for a certain amount of time.

This may be implemented by providing a provision in either a last will and testament or a trust agreement, which places the real property into a separate subtrust overseen by the trustee designated by the grantor. This provision will allocate money to the subtrust in order to cover the property’s maintenance expenses and will include instructions outlining the beneficiary’s rights and responsibilities, as well as the trustee’s responsibilities on the trust’s behalf.

Additionally, the trust instrument will direct what happens to the property once the beneficiary passes away, which may include keeping the property in the trust for another beneficiary, giving it outright to a beneficiary, or selling the property and holding the money in trust for someone’s benefit or distributing it outright to a chosen beneficiary. It is important to note that selling the property can have adverse impacts on homestead status, and the trustee should get legal advice before selling.

Important questions to ask yourself

Considering these questions is essential for successful implementation of this strategy, as it ensures that your instructions are concise:

• Is the tangible personal property, such as furniture and appliances, included with the property?
• Would you like to allocate funds for administrative costs, state and local taxes or assessments, utilities, property insurance, and mortgage payments, or will the beneficiary be responsible for these expenses?
• If the property includes a residence, does the beneficiary have to live there full-time? Are they permitted to allow a subsequent spouse, friend, or companion to reside at the residence?
• Does life changes, like remarriage or admission to a long-term care facility, terminate the right of the beneficiary to stay at the residence?

Is a Right of Occupancy Trust an appropriate solution for you?

If you have a home solely in your name and wish to guarantee your surviving spouse a place to live without risking disinheriting any children from a prior relationship, this approach can provide security for all involved.

If you desire to keep the property within your family’s bloodline by allowing your surviving spouse to use the asset for their lifetime, while ultimately passing ownership to your children, a right of occupancy trust can help to fulfill this goal.

If you have a loved one who is dependent on you and you want to ensure that they have a place to live after your passing, a right of occupancy trust can provide that security for your loved one while also protecting the home for the benefit of other loved ones in the future.

Creating a support team to setup a right of occupancy trust

It is important to involve your team in order to guarantee the realization of your wishes. To do this, a financial advisor should be consulted in order to assess your current financial assets and determine what steps should be taken to guarantee the availability of funds for property maintenance, should the trust be responsible for covering most of the expenses.

An insurance agent should also be consulted to ensure that the residence is correctly insured under all the different ownerships (yours, the right of occupancy trust’s, and the ultimate recipient’s, whether a remainder beneficiary or another trust). Additionally, the insurance agent can offer advice regarding life insurance options should you lack the financial resources or cash assets to provide the necessary funds to maintain the residence.

A tax advisor should be consulted to discuss important tax implications of a right of occupancy trust and to answer these important questions:

• Will your beneficiary be allowed to take any income tax deductions with respect to the property?

• Will the property qualify for any applicable property tax exemptions that may currently be lowering the property tax bill?

• Will the property tax be uncapped at any point during the funding or trust administration?

We can also help you in determining your preferences for handling your assets and providing for your family. Afterwards, we can guarantee that your wishes are lawfully binding and will be followed through after your death, providing you with the assurance that everything will go as planned and your family will be taken care of.

Contact us to set up a consultation if you’re curious about right of occupancy trusts or any of the various ways we may personalize an estate plan to safeguard you and your loved ones.

Approximately 2% of all babies born in the United States in 2019 (83,946) were conceived using assisted reproductive technology, according to data from the Centers for Disease Control and Prevention (CDC).

The CDC defines ART as all fertility treatments involving the manipulation of both eggs and embryos. It can involve numerous procedures, with artificial insemination, in vitro fertilization (IVF), and cryopreservation being the most well-known (genetic material frozen for later use). Surrogacy is a related arrangement in which a woman other than the one who will assume the role of mother carries and delivers a child. A surrogate may utilize the surrogate’s egg and the father’s sperm or carry an embryo implanted via in vitro fertilization that contains genetic material from one or both of the intended parents.

ART can help those who are struggling with infertility, want to avoid passing on genetic risks, or want to store genetic material for future use, as well as same-sex couples who wish to have children. Surprisingly, ART can have a significant impact on the estate planning of families who use it to have children.

Wills and Living Revocable Trusts

Due to the unique issues surrounding ART, it is essential to include children who may be born using ART in your will or revocable living trust when you create or revise it.

What about children conceived following a parent’s death? There have been laws that allow children conceived before the death of one parent, but born after, to inherit from the deceased parent in the same manner as children born to the deceased parent before death. ART has made it possible for children to not only be born after the death of a parent, but also to be conceived using techniques such as in-vitro fertilization or artificial insemination.

It is essential to meet with an experienced estate planning attorney in your state to ensure that your estate plan will achieve your goals, as the laws governing ART vary widely from state to state. Some states consider posthumously conceived children to be heirs of the deceased parent if they were conceived within 36 months of the parent’s death and the deceased parent left a signed document or other clear and convincing evidence indicating an intent for the child or children to be considered their heir.

Other states require that the child be born within two years of the parent’s death, while others require written consent signed by the deceased parent and maintained by the licensed assisting physician indicating the deceased individual’s intent to be the child’s parent.

Due to these stringent requirements, a parent who fails to create a comprehensive estate plan may unintentionally disinherit their own child. Those who use ART or may use it in the future must therefore include posthumously conceived children in their estate plan. In addition, it is crucial that grandparents include posthumously conceived children in their estate planning documents.

Moreover, even if ART is not currently a consideration, trust creators should remember that estate planning documents should account for future generations of the family, especially for multigenerational trusts. All family members who are intended to benefit from the trust, including any posthumously conceived children, should be specified explicitly in the trust document.

What if the child is born many years after the death of the parent? It is important to remember that a child conceived after a parent’s death could be born many years later. This could cause confusion in the administration of a trust or estate. For instance, a deceased parent may leave a bequest to all of their children, including those conceived after death.

What happens, however, if the posthumously conceived child is born years after the personal representative distributes the gifts to the living children? To provide for the posthumously conceived child, would the personal representative need to reacquire a portion of the gifts from the children? To address this potential issue, a time limit should be established within which a posthumously conceived child must be conceived or born in order to inherit money or property, even if such a child is specifically named in a will or trust.

Are survivor benefits from Social Security available to the child? In the 2012 case Astrue v. Capato, the Supreme Court of the United States ruled that a child conceived after the death of his or her biological father is only eligible for Social Security dependent benefits if the child was entitled to inherit from his biological father under state law. As previously mentioned, state law varies widely; therefore, it is crucial that those who may become parents of posthumously conceived children express their intent that those children inherit from them in carefully drafted estate planning documents, and comply with any other state law requirements, such as providing written documentation of the parent’s intention to be maintained by the assisting physician.

Surrogacy

Different states have different laws regarding surrogacy. A few states prohibit surrogacy, but the majority permit it. Some state laws, where allowed, require the intended parents to have wills naming a guardian for their minor children in order to finalize a surrogacy agreement. In situations involving surrogacy, it is essential to complete all required procedures to establish legal parentage, as some states permit prebirth orders while others require adoption proceedings after the birth of the child.

Gifts of Genetic Material

People who decide to use assisted reproductive technology (ART) should enter into a well-drafted written agreement (not just a standard form provided by the medical facility) that specifies who will have custody and control of the genetic material in the event of death, divorce, or other unforeseen circumstances.

Those who opt for cryopreservation may wish to leave their genetic material to a spouse or partner if they pass away before the material is utilized. In addition, as previously mentioned, if the material is intended to be used for posthumous conception, it is crucial that parents express their intention to provide for posthumous children. It may be prudent to set aside funds to cover the cost of storing genetic material during the estate administration process or to specify trust distributions for this purpose.

If you are considering assisted reproductive technology (ART), you may want to include a statement in your living will and power of attorney expressing your intent and instructions regarding the extraction and use of genetic material for conception while you are alive, in case you are unable to express your wishes due to illness or unconsciousness.

ART has been a life-altering solution for many families struggling with infertility or other childbearing obstacles. We can assist you in ensuring that ART-conceived children have a secure financial future. We can also help you decide whether or not to donate your unused genetic material after your death.

Call us today to schedule an appointment so we can design the best estate plan for you and your kids. If you prefer, we can meet with you virtually or over the phone.

The birth of a child is a significant event in every parent’s life, particularly if they have utilized assisted reproductive technology (ART). Using ART necessitates comprehensive financial and estate plans that are uniquely tailored to the needs of your family.

As you continue your journey, we’d like to answer some of the most frequently asked questions about planning for your family.

When should I begin making plans for my child?

Now is a good time from a financial standpoint to begin planning for your child. As you probably already know, the ART process can be costly. Having a proper financial plan can help alleviate some of your concerns throughout the process. Consideration must be given to the cost of food, clothing, shelter, toys, and education when raising a child. Even if you are not expecting a child in the near future, saving money or preparing a budget to cover these costs can put you on the right financial path.

You can create an estate plan for a potential child now and modify it after the birth of a child. Developing an estate plan is not a one-time occurrence. It must adapt to your and your family’s changing circumstances.

What will become of my genetic material after my death?

You or your spouse or partner may store genetic material (e.g., sperm, eggs, embryos) for future use as part of assisted reproductive technology (ART). It is crucial that you review the forms you signed with your doctor or the facility to determine what will happen to genetic material in the event of your death or that of your spouse or partner. Typical options include destroying, donating, and transferring ownership to a named recipient. In many states, courts defer to the contents of the form. Before signing, it is crucial that you understand what it says and agree with the outcome. Additionally, you must know what to do if you change your mind.

What happens if a child is born after the death of a genetic parent? Can the child inherit from the parent who has died?

Do I really need the assistance of an attorney for estate planning?

While the do-it-yourself options may appear to be less expensive and more convenient than working with an attorney, only an experienced estate planning attorney can ensure that your estate plan is tailored to your specific circumstances. Customized language, as opposed to standard definitions for terms, can reduce confusion regarding who and how you want to receive your money and property.

Although the terms parent and child have commonly understood standard definitions, they may have different meanings in your family. For instance, does the term parent refer to a parent’s biological parent, gestational parent, adopted parent, or spouse? Assuming that a parent is the source of genetic material may cause you to overlook an important individual.

Similarly, the term child may have different meanings depending on the context. Does the term child include biological, adopted, and stepchildren? You may consider someone to be your child, but you must ensure that the individual is properly identified as your child in all legal documents.

Lastly, as ART becomes more prevalent, the definition of the term “descendants” may be affected, not only in your plan but also for other members of your family. Do you want your child’s child conceived through assisted reproductive technology to be considered your grandchild, even if there is no genetic link?

We recognize that your path to parenthood may be arduous and filled with ups and downs. We respect your privacy and strive to create a plan that expresses your wishes in a way that is legally enforceable, protects you and your family, and prevents family conflict. Call us to schedule an appointment where we can tailor a plan to your specific requirements.

In the context of estate planning, the term “probate” frequently carries a negative connotation. In fact, financial planners advise many individuals, particularly those with valuable accounts and property, to try to avoid probate whenever possible.

However, the purpose of the probate system is ultimately to protect the deceased’s accounts and property, as well as their family, and in some instances it may even be advantageous. Consider briefly the advantages and disadvantages of probate.

The Pros

In certain instances, particularly when there is no will, the system ensures that all accounts and property are distributed in accordance with state law. Here are some potential benefits of involving the probate court in the administration of a deceased person’s estate:

1. It provides a reliable procedure for the distribution of the deceased person’s property in the absence of a will.

2. If a will exists, it validates and enforces the wishes of the deceased.

3. It ensures that taxes and valid debts are paid so that the beneficiaries are not left with an uncertain feeling regarding the decedent’s affairs.

4. If the deceased had debts or unpaid bills, probate provides a method for limiting the amount of time creditors have to file claims, which may result in debt discharge, reduction, or other advantageous settlement.

5. Probate can be advantageous for the distribution of smaller estates where estate planning would have been too expensive.

6. It allows for third-party oversight by a respected authority figure (judge or clerk), potentially reducing family conflicts and aiding in ensuring everyone’s best behavior.

The Cons

Although probate is intended to facilitate the transfer of accounts and property after a person’s death in a fair manner, consider bypassing the process for the following reasons:

1. Generally speaking, probate is a matter of public record, meaning that certain documents, including personal family and financial information, become accessible to the public.

2. There may be substantial costs, such as court fees, attorney’s fees, and executor fees, which are deducted from the value of the assets you intended to leave to your loved ones.

3. Probate can be time-consuming, delaying the inheritance of your beneficiaries for months or even years.

4. The probate process can be difficult and stressful for the executor and beneficiaries.

The Bottom Line

Probate is a default mechanism that ultimately enforces fair distribution of even small amounts of money and property, but it can be costly and time-consuming. For this reason, many individuals prefer to use strategies to avoid probate when they pass away.

A skilled estate planning attorney can devise a plan to help you avoid probate and make life easier for your heirs. Contact us today to schedule a consultation and receive more information about your options.

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To receive their inheritance after your passing, your beneficiaries may need to start a probate case with the Superior Court. This is likely if you own property (such as a house, car, bank account, investment account, or other asset) in your name alone, and have not designated a pay-on-death, or transfer-on-death beneficiary. Although a will is a fundamental form of planning, it does not prevent probate. Instead, a will merely informs the probate court of your preferences; your loved ones must still go through the probate process to distribute your asset.

Now that you understand why probate may be required, consider the following three reasons for avoiding probate whenever possible:

1. Everything is public record.

Almost every court proceeding, including probate, becomes a matter of public record. Therefore, in order to properly wind up your affairs after your death (i.e., pay your bills, submit any remaining tax returns, and distribute your money and property to your selected beneficiaries), a lot of personal and private information will become public through the probate court, including your family and financial information.

The courts have at least taken efforts to reduce the risk of identity theft, so this does not necessarily imply that account numbers and Social Security numbers will be made public.

However, the amount of your accounts and property, creditor claims, the identity of your beneficiaries, contact information for your loved ones, and even family disputes that affect the distribution of your money and property may all be made public.

The easiest method to protect your privacy is to keep your affairs out of probate, as most individuals want to keep this type of information private.

2. It can be costly.

Due to court charges, attorney’s fees, executor fees, and other expenses, the cost of probate can rapidly approach thousands of dollars, even for small estates. If a family member or beneficiary contests the estate, or creditor claims are filed in the probate case, these costs can quickly escalate into the tens of thousands of dollars or more. Your money and property should go to your loved ones, but if your estate goes through probate, a considerable percentage may be allocated to executor fees, legal fees, and court costs.

While creating a will or estate plan that avoids probate does cost money, Benjamin Franklin said it best: “An ounce of prevention is worth a pound of cure.”

Costs incurred now to implement a plan are more easily controlled than uncertain costs in the future, especially when you consider that your loved ones may be grieving while making important estate and financial decisions. You can decrease the possibility of costly disagreement and reduce or eliminate some costs via careful planning.

3. It will take some time.

Although the length of time required to probate an estate can vary significantly by county and based on the value, quantity, and complexity of the deceased person’s assets and property, probate is typically a lengthy procedure. Even probate cases that seem simple can a year or more. During this time, your beneficiaries will not have easy access to the money and property you left them. This delay can be especially challenging for loved ones enduring financial, emotional or medical challenges, as they could benefit from a quicker, more straightforward process, such as the administration of a living trust. Bypassing probate can expedite the distribution of money and property, allowing the beneficiaries to receive their inheritance sooner than they would under probate.

If you own real estate in many states, you generally will have a probate case in each state where your real estate is located. These additional probate cases may cost your family members more time and money. The good news is that with effective trust-centered estate planning, you likely will avoid probate in every state, streamlining the transfer of your financial legacy.

Schedule a Consultation

To learn more, please contact us to schedule a consultation. We will gladly discuss formulating an estate plan strategy to help you avoid probate.

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Here are five things to consider before embarking on your next adventure to ensure your safety and the safety of your loved ones:

1. Have you established a basic estate plan, and, if so, have you had it reviewed recently?

An estate plan is a set of documents that outline your wishes for your care and the care of any of your dependents, as well as the management of your finances and assets. You provide these instructions to trusted individuals who can make decisions on your behalf.

Last will and testament

One aspect of an estate plan may be a last will and testament, also known as a will. This document allows you to appoint someone to handle the distribution of your assets and property after your death. You can also name a guardian for your minor children, if you have any. However, a will only goes into effect upon your death, and the probate process (a legal procedure overseen by the court to validate the will and to make sure it is followed correctly) may be necessary to carry out its provisions. This process can be costly, time-consuming, and public, which is why it’s important to consider all of your options when creating an estate plan.

Revocable living trust

This is document that you create that sets out how your assets and property will be managed both during your lifetime and when you pass away. For the trust to work, you have to transfer certain of your assets and property to the trust. For your trust to own your accounts and property, they will either be retitled in the name of your trust (instead of in your sole name) or the trust will be named as the beneficiary that will receive money and property at your death. The trust document provides instructions to the trustee, who is the person you have chosen to manage the trust. Initially, you will serve as the trustee of your own trust, which means you maintain control over the trust’s assets. You can also continue to benefit from these assets as a trust beneficiary. If you become incapacitated or pass away, the successor trustee you have designated can take over management of the trust without court intervention. Because the trust owns your property or is named as the beneficiary of your assets, there is nothing that needs to go through probate upon your death. The trust becomes effective as soon as you sign it.

Review your documents

It’s important to regularly review your estate planning documents to ensure that they still accurately reflect your wishes. If you have experienced major life changes, you may need to reconsider your estate plan. If you have a revocable living trust as part of your estate plan, it is crucial to ensure that all accounts and property intended to be owned by the trust have been properly transferred, and that any accounts or property naming the trust as a beneficiary have the appropriate documentation in place.

2. Can someone manage your financial affairs when you cannot?

If you are traveling abroad, it may be more challenging to manage your personal financial affairs (such as paying rent or following up on an insurance claim). However, just because you are unable to do these things does not mean that they cannot be handled by someone else.

To appoint a trusted individual to handle your financial affairs while you are abroad, you can create a durable financial power of attorney. This document allows you to specify when the person you have chosen should have the authority to act on your behalf. You can choose to grant this power immediately, or only in the event that you are unable to make decisions for yourself. If you are traveling internationally, you may want to consider granting the power of attorney immediately so that your chosen decision maker can act quickly if needed. You can also customize the level of authority granted to your decision maker, whether it be limited to a specific transaction or broad enough to cover most financial matters. This is a personal decision based on your specific needs and circumstances.

3. How will you manage your health while you are away?

To ensure that you have someone to make medical decisions on your behalf if necessary, it’s important to appoint a trusted individual through a medical power of attorney, sometimes called an advance health care directive. This is often included in a comprehensive estate plan, along with a living will or advance directive outlining your end-of-life wishes, and a HIPAA authorization allowing named individuals to access your private healthcare information. Keep in mind that these documents may not be recognized in other countries, so if you are traveling internationally for an extended period of time, you may need to consider naming a medical decision maker according to the laws of the country you are visiting.

Additionally, it’s important to determine whether your health insurance will be accepted overseas, as it may only be valid in the United States. If necessary, you may need to secure a short-term health insurance policy to cover you while traveling.

4. Speaking of insurance, do you have adequate insurance?

There are two other types of insurance that can be useful while traveling: travel insurance and life insurance.

Travel insurance can help you navigate unexpected complications that may arise during an international trip, and it may save you money in an emergency, depending on the cost of your trip and the items you are taking.

Life insurance is also important to have and review. It’s essential to correctly designate beneficiaries and to review the policy terms to ensure that your coverage will not be voided by any activities you plan to engage in while on vacation.

Some insurance companies may not pay out if the insured has participated in extreme activities such as bungee jumping, skydiving, or scuba diving, so it’s important to be aware of any exclusions in your policy.

5. What arrangements have you made for your minor children?

If you have minor children, it’s important to make arrangements for their care while you are traveling. If your children will be traveling with you, they will need a passport, which needs to be renewed more frequently for children than for adults.

Some countries may require proof of your relationship as a parent or legal guardian to ensure the safety of the children. If your children will be staying with someone else while you are away, it’s important to have the appropriate documentation in place to authorize the chosen adult to care for them.

It’s also important to have a last will and testament that names a guardian for your children in the event that you and their other legal parent are unable to care for them. While such a document does not avoid court involvement, they can help ensure that your wishes for your children’s care are honored.

We can help!

We understand that planning for international travel involves a lot of considerations. Let us help you ensure that you are properly protecting yourself and your loved ones during your trip. Contact us to schedule an appointment before you leave.

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