In this article, you will learn:
Estate planning is the process of organizing everything you own so that you can pass it to your beneficiaries in the way that you want it. This is necessary because if you don’t make your own plan, then the state of Louisiana will resort to the state law, and that plan may not end up benefitting the people, charities, or the things that you wanted done with your estate after you pass away.
How Estate Planning Can Benefit You In Life
While most people think of estate planning as only functional after your death, there’s actually a really important part of estate planning that addresses what happens if you ever become incapacitated. So, if you were to be in a serious accident and be in a temporary coma or any such thing where you’re not able to handle your affairs, an estate plan can provide a way for you to appoint somebody to do those things for you. The alternative is, they would have to go to court to get permission to handle your affairs, and you just don’t want to do that because it’s expensive, time-consuming, and you may end up with the wrong people in-charge.
Wills And Their Power Independently
A will is basically a document that you execute while you’re alive. You appoint an executor, who is the person to be in-charge of managing your estate after you’re gone, and then you can also name your beneficiaries, the people who are going to inherit from you. A will is the first thing everybody needs. However I don’t think it’s enough for several reasons. The main reason it’s not enough is because it doesn’t address those incapacity issues that I talked about earlier. A will is only going to help you after you’re dead. If you have a long-term disability or other illness where you lose capacity for some period of time, which means that you can’t handle your own financial affairs, a will is not going to be any help. You’ll need to have somebody appointed to take care of you.
The other issue, of course, is that in Louisiana, a will still has to go through the probate process, so your executor will still have to bring it to the court to file it, open a succession, and go through the whole probate process after you’re gone.
The Most Common Types Of Trusts In Louisiana
A trust is basically a legal agreement between a settlor and a trustee for the benefit of a third person who is the beneficiary. So, think of a trust like a box that you put your belongings in, and it has certain rules about who can go in the box, what they can do with the assets, and it also states who gets the assets in the box ultimately. The trust could be revocable, which means the box is something that you can open and close during your life and take things in and out as you wish, or it could be irrevocable, which means once you create the trust and put your stuff in it, it’s locked, and you can no longer get into it. Only the trustee would have the key to that trust.
There are different purposes for these trusts as well. For example, if we want to do estate planning where we want the trust to take the place of your will, and state who gets your stuff after you die, we can use a revocable trust. If we want to use the trust to plan for a long-term care and maybe Medicaid qualification and asset protection, then we would need to do an irrevocable trust.
Controlling Your Assets After You’ve Put Them Into A Trust
If you put your assets into a revocable trust, you keep complete control. There’s only a revocable living trust, you serve all three purposes. You are the trustee, you are the beneficiary, and you’re also the grantor. So, this means you have full control over that trust while you’re alive. And even with irrevocable trusts, it’s possible to keep some control.