Introduction 1 About This Book 1 A Special Note for Residents of Louisiana 2 Conventions Used in This Book 2 Foolish Assumptions 2 Icons Used In This Book 3 Beyond the Book 3 Where to Go from Here 4 Part 1: Getting Started With Your Will or Trust 5 Chapter 1: Ensuring That Your Last Wishes Are Honored 7 The Good, the Bad, and the Ugly: What Can Happen When You Don''t Plan Your Estate 8 Reaping the Benefits of Planning Your Estate 9 Planning for your care while you''re alive 9 Ensuring that your assets go where you want 10 Making things easier for your family 11 Looking Out for Common Pitfalls 12 Benefits and dangers of jointly titling real estate, property, and bank accounts 12 Benefits and dangers of having your assets "pay or transfer on death" 13 Benefits and dangers of life estates 14 Danger of subjecting an asset to Medicaid spend-down rules 15 Potential for increased tax exposure 17 Realizing What Happens If You Don''t Have an Estate Plan 17 Following the laws of intestate succession 18 Determining the custodian of your minor children 18 Creating Your Will or Trust 19 Deciding who should create it 20 Understanding the process 20 Thinking about your kids, money, life insurance, and more 22 Telling Your Family about Your Estate Plan 23 Chapter 2: Making Crucial Decisions 25 Going It Alone 25 Are you comfortable doing it yourself? 26 How complicated is your estate? 26 Choosing a Will or Trust for Your Estate 29 What a will can do for you 29 What a trust can do for you 30 You may benefit from having both 31 Going with a Pro 31 How lawyers and accountants can help 32 Do you save money in the long haul? 32 Working with a Professional 34 Hiring a lawyer 34 Meeting with your lawyer 35 Reviewing and executing the documents 35 Taking the final steps 36 Safeguarding Your Estate Plan 37 The problem of the disappearing document 37 Storing your will or trust 39 Registration of wills and trusts 39 Chapter 3: Gathering Pertinent Information 41 Asking Yourself Some Basic Questions 41 Identifying Your Assets 42 Real estate 44 Personal property 45 Titled personal property 46 Savings 46 Investments 46 Insurance policies and annuities 47 Retirement savings 47 Pensions 48 Considering Community and Jointly Owned Property 48 Valuing Your Property 50 Chapter 4: Planning Your Bequests 53 Calculating Your Assets 53 Determining Your Intended Heirs and Beneficiaries 54 Individuals 55 Institutions or charities 57 Other bequests 57 Thinking about Your Family Circumstances 57 Talking to your family 58 Jealousy and rivalry 59 Pressure from your family 59 Property That Pays or Transfers on Death 60 Estate Planning for Second Families 61 Giving your new spouse a life estate 62 Using trusts to hold your assets 63 More tools to consider 64 Estate Planning for Your Business 65 Inheritance of your sole proprietorship 67 Inheritance of your share of a business 68 Appointing the People Who Will Carry Out Your Estate Plans 68 Choosing your personal representative or trustee 69 Choosing a successor 71 Discussing your estate plan with your helpers 71 Finding Professionals to Assist You 72 Getting help from a lawyer 72 Hiring an accountant 73 Using professional trust services (institutional trustees) 73 Chapter 5: Providing for Your Children and Dependents 77 Choosing a Guardian 77 Making the decision 78 Choosing a guardian other than the noncustodial parent 79 Managing Your Child''s Assets 80 Providing for Your Child''s Needs 81 Your child''s education 81 Your child''s special needs 84 Your child''s financial stability 85 Chapter 6: Dipping into Your Pocket: The Tax Man (and Others) 87 Tallying Up Your Estate''s Tax Liabilities 88 Federal estate taxes -- a moving target 88 The generation-skipping transfer tax 89 State estate taxes 90 Gift taxes 91 Minimizing Tax Costs and Liabilities 93 Leaving your estate to your spouse 94 Making gifts 95 Using trusts to avoid estate taxes 96 Creating a Family Limited Partnership 97 Seeing the Big Picture: Tax Avoidance Should Not Dictate Your Estate Plan 99 Paying Your Estate''s Debts 99 Medical costs and Medicaid reimbursements 101 Payment of bills, loans, and mortgages 103 Payment of funeral expenses 103 Covering Administration Costs 104 Court costs 104 Legal fees 104 Administrator''s fees 105 Trustee''s fees 106 Part 2: Everything You Need to Know About Wills 107 Chapter 7: Writing and Signing a Will 109 Deciding Whether a Will Serves Your Needs 110 Simplicity often leads you to a will 110 Assets not covered by a will 111 Exploring the Types of Wills 113 The statutory will 114 The handwritten (holographic) will 114 A will of your own 114 Other wills 115 Elements of a Will 117 Who you are 117 What are your assets 118 Who are your beneficiaries 119 What are your bequests 119 Reference to a tangible personal property memorandum 122 What happens with the residue (if any) of the estate 122 Payment of debts by the estate 123 Describing your funeral and burial wishes 123 Designating a personal representative 124 Designating a guardian for any minor children 124 Your signature 124 Executing a Valid Will 125 Choosing the right witnesses 125 Signing and executing your will 125 Chapter 8: Navigating the Land Mines 127 Identifying Common Land Mines 127 Disinheriting heirs, known and unknown 128 Avoiding invalidating part or all of your will 132 Lashing out from beyond 136 Handling simultaneous death of spouses 137 Realizing Why You Must Update Your Will 138 Your goals and wishes may change over time 138 Your assets may change over time 138 Family changes may invalidate your will 140 Family changes may dramatically alter who inherits under your will 140 Knowing What to Do If You Lose Your Will 143 Chapter 9: When You Already Have a Will 145 Reviewing and Updating Your Will 146 Changes in your family circumstances 146 Changes in your wishes 149 Changes in your financial situation 150 Changing Your Will 152 Adding to your will (amendment by codicil) 153 Executing a valid codicil 154 Revoking Your Will 154 How to revoke a will 155 What to do with a revoked will 155 Chapter 10: Estate Administration: What Happens in Probate Court 157 Navigating Probate Court 157 Discovering How Estate Size Affects Probate Procedures 158 Probate for small estates 159 Probate for larger estates 160 Understanding the Role of the Personal Representative 160 Giving notice to legal heirs 161 Collecting property for distribution 162 Notifying and paying creditors 162 Distributing bequests 163 Hiring a Lawyer 163 Overseeing Probate: The Judge 164 Avoiding Will Contests 165 Validity 166 Mental incapacity 167 Undue influence 168 Part 3: Trust me! How Trusts Work 171 Chapter 11: The Anatomy of a Trust 173 What''s a Trust and Why You Need One 173 Benefiting from Trusts 174 They''re flexible 174 You can provide for your incapacity 176 You can avoid taxes 176 You can avoid probate 177 A trust can help protect your privacy 178 Selecting a Trustee 178 Choosing Your Beneficiaries 181 Transferring Assets into Your Trust 181 Staying in control 182 Giving (or limiting) your trustee powers 182 Cancelling the trust 183 Distributing trust assets 183 Putting Your Trust into Effect 184 When the Trust Ends 186 Chapter 12: Dead or Alive: Picking Your Trust 187 Why So Many Choices? 187 The Revocable Living Trust 188 The benefits 189 Possible drawbacks 190 Choosing from Other Trusts 192 Trusts to avoid the tax man: Asset protection trusts 193 Trusts for people who can''t manage money: Spendthrift trusts 194 Trusts for doing good: Charitable trusts 195 Trusts to avoid gift taxes: Crummey trusts 196 Trusts for people who receive government benefits: Special needs trusts 197 Trusts to protect your estate plan if you predecease your spouse: Bypass trusts 198 Trusts where you control the trust assets 199 Trusts that own life insurance: Irrevocable life insurance trusts (ILITs) 202 Trusts for multiple generations: Dynasty trusts (generation-skipping trusts) 203 Trusts to postpone estate taxes: Qualified terminable interest property trusts (QTIPs) 204 Trusts for your pet 204 Deciding Which Trust Is Right for You 205 Serving your personal needs 205 Serving the needs of your family 206 Thinking about the tax man 207 Chapter 13: When You Already Have a Trust 209.