Wills, Trusts, and Estates

Our Practice

In our wills, trusts, and estates practice, the Law Offices of George L. Bischof advises families and individuals about a range of estate planning decisions and documents. A typical set of documents for a couple first approaching estate planning will include a will, a living will/health-care proxy, and a durable power of attorney. More sophisticated planning can include revocable lifetime trusts, irrevocable life insurance trusts, and vehicles for structured charitable giving. A brief survey of estate planning documents and issues follows.

Wills
In addition to setting forth your wishes about who should receive your assets, a well-drafted will answer several other crucial questions about your estate. (i) Who do you want to be the Executor, the person responsible for identifying and collecting the assets of your estate, paying your just debts and expenses, dealing with your surviving family and other relatives, dealing with the probate court, and filing appropriate tax returns? (ii) Who you want to be your minor children’s Guardian? Or back-up Guardian, if your guardian is unable or willing to care for your minor children? (iii) Who will be the Trustees of your assets, if they are held in trust for your minor children, or if you create trusts for tax-planning purposes? Finally, a well-drafted will can significantly improve your estate’s tax position, often substantially reducing the imposition of tax not only on your estate, but on the estate of your surviving spouse.

Living Will
You would use a Living Will to expresses your desires with regard to health care treatment if you become mentally incapable and/or physically incapable of expressing those desires. It can include, but need not be limited to, instructions concerning the termination of life support. New York law requires clear and convincing evidence of what the patient would want, which is why it makes sense to use a standard form, properly executed. A Health-Care Proxy can be included as part of the Living Will document.

Heath Care Proxy
You would use a Health-Care Proxy to appoint someone you trust – your spouse, other family member, or a close friend - to make health care decisions for you if you lose the ability to make decisions yourself. Your agent can also decide how your wishes apply as your medical condition changes, and your agent’s decisions will be binding on hospitals, doctors and other health care providers as if they were your own. You may allow your agent to make all health care decisions or only certain ones, and you may provide instructions that he or she has to follow (for instance, in a living will). The Health-Care Proxy can also be used to document your wishes or instructions with regard to organ and/or tissue donation. A Health-Care Proxy can be included as part of the Living Will document.

Durable General Power of Attorney
You would use a Power of Attorney to appoint an “agent” or “attorney in fact” (usually your spouse or other close relative). The Power of Attorney grants your agent broad powers to manage your affairs, including making legal and financial decisions, but not including health care decisions (the Health-Care Proxy grants that authority). You would use this document to cover the case in which you become incapacitated and you want someone to be able to manage your affairs for you; a “Durable” Power of Attorney is so called because the it remains in effect even after you become incapacitated. It can be revoked at any time.

Estate Administration
When a person with a will dies leaving any property at all (including real estate, financial assets, money, and personal property), a probate court is involved in confirming the validity of the Will, confirming the authority of the Executor to handle the decedent’s assets, overseeing the payment of debts and taxes, and approving the distribution of assets to the beneficiaries. When a person dies without a Will, the probate court will typically appoint an “Administrator” to handle the same kinds of tasks an Executor would have handled.

In New York, the probate courts are in each county and are called Surrogate’s Courts; in Connecticut, the probate courts are in most larger towns and cities and are called Probate Courts. Most probate courts have helpful guidance for the handling of small estates, but Executors for larger estates will almost certainly want to engage professional advice, usually an experienced estate administration lawyer and sometimes also tax counsel. Most states have good introductory information about their probate courts on the web. See, for example, the pages for the New York Surrogate’s Courts and the Connecticut Probate Courts.

Various Kinds of Trusts
A “Trust” is a legal structure that is managed by a Trustee (who technically “owns” the trust assets “in trust” for the benefit of others) under terms that specify when and to whom income and principal are paid. The Trust provisions also determine when the Trust terminates and assets are distributed to the ultimate beneficiaries. Trusts are exceptionally flexible and, within some constraints, can be adapted to a tremendous range of purposes. Several more common arrangements are described below.

Testamentary Trusts
Any trust that is created by a Will (or by another trust) upon the death of the creator is called a “testamentary” trust. The most common examples are trusts created by a decedent’s Will for the benefit of a surviving spouse or for the decedent’s minor children.

Revocable Lifetime Trusts
Also known as an “inter vivos” trust or a Living Trust, a Revocable Lifetime Trust can be an efficient complement (not a substitute!) to a Will. Like a Will, a well-drafted Revocable Lifetime Trust provides for distribution of property at death, with some significant advantages: (i) the distribution is not overseen by the probate courts, which means that the probate process and probate fees are avoided (which can be faster as well as cheaper); (ii) the distribution is not part of the public record, like probate is, and can therefore be wholly private; and (iii) distribution through a Revocable Lifetime Trust is much more difficult for beneficiaries and others to challenge. Minor disadvantages include the need to transfer the creator’s assets into the Revocable Lifetime Trust (which may include re-titling property and financial accounts). Note that using a Revocable Lifetime Trust will typically have NO effect on estate and death taxes.

Life Insurance Trusts
A well-drafted irrevocable trust can hold life insurance policies that will NOT be subject to estate taxes on death. This can be an exceptionally powerful structure for reducing the impact of estate taxes.

Charitable Trusts
There are a wide variety of charitable trust structures, so-called because a specific charity (or charities) will be a current or ultimate beneficiary. There are substantial tax benefits available to the non-charitable beneficiaries, which can include the creator himself and others. Charitable trusts offer very attractive opportunities to combine charitable giving, distribution of income or assets to one’s own family, and significant tax savings.