Delaware Real Estate Attorneys
Estate Planning
Estate Planning
Estate planning, a continuous process, extends beyond the mere creation of a Will. It encompasses decisions about who will act on your behalf, the guardianship of your dependents, and strategies to minimize taxes and eliminate unnecessary waiting periods.
This comprehensive planning process addresses various aspects, including financial matters, property distribution, medical care directives, and the welfare of dependents. Essentially, estate planning deals with the intricate web of decisions that surface at an individual's death.
The primary advantage of engaging in estate planning is the assurance that your wishes will be executed for the well-being of your loved ones. At the very least, it is advisable for everyone to have a basic estate plan in effect, providing a sense of security and peace of mind.
Last Will & Testament
A Last Will and Testament, commonly known as a Will, is a legally binding document outlining your asset distribution and can include guardianship preferences for your children after your death.
A well-prepared Will safeguards your assets, spouse, and heirs by legally specifying your wishes for the future, ensuring they won't be overlooked.
In the absence of a Will, assets will be distributed according to your state laws under what are known as the intestacy statutes.
Testamentary Trust
A Testamentary Trust, also referred to as a "Trust Under Will" or a "Will Trust," is embedded within a Will. Unlike trusts established during one's lifetime, a Testamentary Trust comes into effect only after your passing and must go through the probate process. It is commonly employed for minor children or beneficiaries requiring extended care, such as dependents with special needs.
Amending Your Estate Plan
There's no fixed timeframe for updating your Estate Plan, but a practical guideline is to review it with every "major life event," such as the birth of a child, death of a relevant individual, marriage, divorce, property ownership changes, or relocation to a new state or country. Even in the absence of major events, periodic reviews, ideally every 3-5 years, are advisable to ensure your plan remains up to date.
Advance Healthcare Directive
An Advance Healthcare Directive, also known as a “Living Will” allows you to communicate with healthcare providers, family, and friends about what matters most to you in terms of health, healthcare, and illness. Beyond offering personal peace of mind, a completed Directive provides guidance to those who may need to speak on your behalf in the future. Regardless of age or health status, it enables you to clearly express your healthcare goals, values, and preferences.
Durable Power of Attorney
A Durable Power of Attorney grants authority to an individual who is called an “Agent” —whether a relative, friend, or professional—to make legal and financial decisions on behalf of another person. Unlike regular powers of attorney, a durable power of attorney remains effective until the grantor's death or cancellation, eliminating the need for periodic renewals.
Revocable Living Trusts
A Revocable Living Trust, also known as a living trust or inter vivos trust, is a personalized strategy for managing your assets while you're alive. At the creation of the trust, you, the grantor/trustor appoint a trustee (which can initially be you), to handle your belongings for you and your loved ones. Unlike a Will, this trust offers the flexibility to be changed whenever you wish, giving you greater control.
Opting for a Revocable Living Trust can spare your estate and heirs from the complexities and expenses of probate. Living trusts are crafted while you're still around, distinct from trusts that arise after someone passes away (e.g., testamentary trusts).
Benefits:
Safeguards against incapacity
The trust must be established while the person is mentally competent to consent; otherwise, it lacks legal validity. In the event of the person's death or incapacity to manage financial matters, the trustee or successor trustee assumes control.Can reduce expenses associated with Probate
Probate is the court-supervised procedure overseeing the distribution of your assets after your passing. Assets held in a trust usually avoid Probate, offering a faster and more cost-effective alternative.Preserves confidentiality
While probate proceedings are often public record, assets held within a living trust can bypass probate, ensuring privacy, if structured correctly.
Irrevocable Trusts
An Irrevocable Trust is a legal arrangement that is generally unalterable and can only be modified if the designated beneficiary or beneficiaries consent. Some individuals opt for irrevocable trusts to minimize taxes and safeguard assets from creditors or potential claims following the trust creator's death.
Benefits:
Establishing a tax shelter
Shielding assets from creditors
Meeting income and/or asset threshold criteria for specific government benefits
Irrevocable trusts can also be employed for specific purposes, such as setting up a special needs trust to support disabled beneficiaries.
Probate
What is Probate?
Probate is the formal legal procedure that validates a will, appoints an executor or personal representative, and oversees the distribution of assets to beneficiaries. In cases where there is no Will (meaning your estate is intestate), this process becomes more complicated.
When is Probate Required?
Probating an Estate in Delaware is a requirement when the decedent resided there at their time of death, regardless of the presence of a valid Will.
If the decedent had over $30,000 in personal property in their name alone or owned Delaware real estate in their name, an Estate must be probated.
The Estate is considered open when the Register of Wills grants Letters Testamentary or Letters of Administration to the Executor or Next-of-kin. This process typically takes about one (1) year, and the appointed personal representatives have various responsibilities.
What are the duties of a Personal Representative?
The duties of a personal representative encompass several tasks. These include submitting a certified copy of the death certificate to the Register of Wills, paying the expenses to initiate the Estate (which varies based on the value of solely held personal property), posting a bond if required, publishing a legal notice in a local newspaper to inform creditors, overseeing the collection, management, and protection of all probate assets, filing an inventory of assets within 90 days of Estate commencement, settling the debts of the decedent, submitting an accounting to the Register of Wills Office within a year of Estate initiation, and officially concluding the Estate at the Register of Wills Office (which also involves closing fees).
Small Estates
If the deceased person neither solely owned Delaware real estate nor possessed more than $30,000 in assets (applicable for deaths after 5/1/2004), a Small Estate Affidavit may be filed with the Register of Wills.
A Small Estate Affidavit provides a streamlined way to access the deceased person's assets without undergoing the full probate process. The designated Executor in a valid, self-proven Will, or if no Will exists, the closest next of kin, can obtain a Small Estate Affidavit from the Register of Wills 30 days after the date of death.
