Estate planning is not just for rich people. There are many reasons why most of the less wealthy residents of Louisiana would also benefit from an estate plan. One strong motivator would be if there are minor children. In that situation, the parents would make out mutually reciprocal wills, leaving their estates to each other and then to the children, usually in equal shares, in the event that both parents are deceased.
Reciprocal wills can contain testamentary trusts in which an appointed trustee would use the trust for the education, health and welfare of the children. Instead of releasing the trust corpus to the children at age 18, the trust can be set up to provide staggered distributions at later ages. Alternatively, the maker can provide for one distribution of each child’s share at, for example, age 25.
The same trust purpose can be incorporated into a living trust, which is effective during the maker’s life. The maker’s assets are transferred to the trust and the proceeds distributed according to the trust’s terms. There may also be provisions for disposition of the trust corpus and interest after the maker’s death. In that event, the living trust avoids putting assets through probate and escapes the paperwork and court scrutiny of a probate estate.
The decisions of how to structure a living trust and/or mutual reciprocal wills are complex enough that they should be made after consultation with an experienced estate planning attorney. There are various powers of attorney that are likely to be recommended, along with a variety of potential other estate planning documents. The wishes of the parents will be of primary importance in the process, and the estate planning attorney in Louisiana is trained to know the most appropriate structures for any particular situation that presents itself.
Source: mvtimes.com, “Estate planning: It’s not just for the wealthy“, John Kageleiry, Dec. 5, 2017