Estate Planning

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What Is Estate Planning?

Estate planning is the preparation of documents to protect and manage your assets and personal property in the event of your incapacitation or death.

An estate plan may consist of the following documents:

Revocable Living Trust – Your Revocable Living Trust is the foundation of your estate plan. It contains your instructions for your own care and the care of your family if you become disabled, as well as for the distribution of your assets upon your death. Your Revocable Living Trust allows you to keep your instructions and financial affairs private and ensures that your instructions are carried out efficiently without unnecessary judicial involvement.

Last Will and Testament – Your Last Will and Testament contains your instructions for the distribution of any assets owned by you, personally, at the time of your death. Typically, if you have a Revocable Living Trust, your Last Will and Testament leaves any property that was not transferred to your Revocable Living Trust before your death to your Revocable Living Trust. Thus, the Last Will and Testament functions as a safety net to ensure that the property owned in your individual name rather than in the name of your Revocable Living Trust at the time of your death is ultimately managed by your successor Trustees as provided in your Revocable Living Trust.

Power of Attorney – With this document, you appoint an agent to act for you if you become incapacitated. Your agent is authorized to transfer property to your Revocable Living Trust, to make withdrawals from your retirement assets, or to do anything else that you want your agent to do for you if you become incapacitated.

Advance Health Care Directive – Your Advance Health-Care Directive authorizes your agent to make medical decisions for you if you cannot express your wishes or make the decisions yourself. In addition, your Advance Health-Care Directive authorizes your agent to obtain copies of your medical records.

Real Property Transfers – Property deeds are formal, legal documents that transfer a person’s rights of ownership to another individual or entity.

Funding and organizing of existing trusts – Instructions that explain how to transfer your assets to your Revocable Trust and how to name your Revocable Trust as your beneficiary.

Asset protection trusts – an estate planning device which provides protection of your assets from future creditors, future lawsuits, and any future judgment.

Do you need an Estate Plan?

Many people assume that estate planning is necessary only for the wealthy and elderly, when, in fact, everyone should have at least a basic estate plan, regardless of income, net worth or age. An estate plan can protect you and your assets not only after you die, but during your lifetime as well.

Reasons for Estate Planning

The following are a few of the many reasons why you should establish an estate plan:
  1. Loss of capacity – With an estate plan, you can choose who you want to manage your affairs if you become incapable of doing so.
  2. Minor children – With an estate plan, you can nominate the guardian of your choice.
  3. Blended families – With an estate plan, you can determine what goes to your current spouse and to the children from a prior marriage or marriages.
  4. Keeping assets in the family – With an estate plan, you can ensure that your assets will stay in your family and pass on to your grandchildren versus spouses and ex-spouses of your children.
  5. Avoiding Probate – With an estate plan, you can structure your financial affairs so that the court-monitored probate process can be avoided entirely.
An estate plan is most effective when you keep it as current as possible. You should review your estate plan regularly – or as often as changes occur in your professional and personal life. There is no better way to protect your loved ones than leaving an estate plan that is thorough and up-to-date.

Estate Planning Questions

  • i. What is the difference between a will and trust?

    A Revocable Living Trust (“RLT”) is a common estate planning tool which allows a person (“Grantor” or “Settlor”) to place his or her assets in trust and provide for the distribution of those assets upon death without the necessity of opening a probate proceeding.  During his or her lifetime and as long as he or she has the requisite capacity, the Grantor retains the right to amend and revoke the RLT.  The Grantor can designate a successor trustee(s) to administer the RLT in times of incapacity and after the Grantor’s death.


    A Will is another common estate planning tool which allows a person (“Testator”) to provide for the distribution of Testator’s estate upon death.  Testator’s estate includes assets that were not placed in trust during his/her lifetime and assets that do not have a beneficiary designation.  Unlike a Revocable Living Trust, a Will must go through probate to be enforced.  A “pour-over” will is often executed at the same time as a Trust to provide that any assets not placed in the Trust will be “poured over” into the Trust upon the Testator’s death.

  • ii. What is a power of attorney?

    A Power of Attorney is a legal document in which one person (“Principal”) grants another person (“Agent”) the authority to sign legally binding documents on his/her behalf.  If it is a durable power of attorney, the Agent’s authority survives the subsequent incapacity of the Principal.  In either case, the Agent’s authority ends upon the death of the Principal.

  • iii. What is an Advance Health Care Directive?

    An Advance Health Care Directive is a legal document in which one person (“Principal”) grants another person (“Health Care Agent”) the authority to make medical decisions when the Principal is unable to make those decisions on his or her own.  An Advance Health Care also allows the Principal to express his or her wishes with respect to specific medical situations.

  • iv. How to fund a trust?

    It is essential that your trust is funded with property.  Most assets will require title changes in the ownership of the assets from you, individually, to the trustee of your trust.  If you choose to place your life insurance or retirement accounts in the trust, you will need to change the beneficiary designation forms.  The firm can assist you with certain methods of funding, including transferring real property into your trust, but ultimately, funding of the trust is the client’s responsibility.

  • v. When should you renew your estate plan?

    Having a Revocable Living Trust and/or a Will to prepare for your death is something everyone should plan for. Estate planning documents should be updated to reflect significant life changes (e.g. marriage, divorce, a birth or death in the family or significant changes to your financial condition). Following these changing life events, it is often a good time to sit down with an estate planning attorney to ensure that your estate planning documents remain legal and relevant.

  • vi. Do you need a estate plan?

    Many people assume that estate planning is necessary only for the wealthy and elderly, when, in fact, everyone should have at least a basic estate plan, regardless of income, net worth, or age. An estate plan can protect you and your assets not only after you die but during your lifetime as well.

Phone Consultation

with Michael D. Rudy*

Please prepare the following for your phone consultation:
 
  1. Timeline of your case
  2. Synopsis of facts
  3. Supporting documentation
  4. List of names of key participants.
 
Micheal D Rudy Founding Partner of MacDonald Rudy Law Firm

MICHAEL D. RUDY
Founding Partner

MICHAEL D. RUDY is a founding partner of MacDonald Rudy O’Neill & Yamauchi, a Limited Liability Law Partnership, LLP. Mr. Rudy founded the firm in 1992 and has concentrated his practice over the last two decades in the area of trust and estate litigation in both state and federal courts. Mr. Rudy has litigated extremely large trust and estate litigation contests as well as more modest size disputes throughout the State of Hawaii. Mr. Rudy’s practice is focused on wills, estates and trust litigation, business transactions and formations, contested guardianships and conservatorships, simple and complex probate, business and real property disputes.

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