Estate planning includes special bequests, devises, or more simply known as ‘specific gifts’ of assets made through a Will or a Trust. It is important to write Special Bequests and Devises into a Will or Trust in order to ensure that the intended beneficiary is able to receive the specific item or items.
I like to think of a Will as a ‘love letter’ that describes who will be in charge of your estate, who will receive specific gifts, and who will receive the remaining assets of your estate after your creditors are paid. A will does not give legal authority to anyone until the Will has been filed with the probate court. A Will does not avoid probate, the court proceeding that administers the Will.
A Devise is a gift by will. A devise can gift land (real property) or personal property. A person who receives a ‘devise’ is a ‘devisee.’
At the Soto Law Firm, P.C., we handle the following types of trusts:
- Revocable living trusts, also known as a living trust
- Irrevocable trusts
- Special needs trusts (For Minors and Disabled Beneficiaries)
- Education trusts
- Pet trusts, which are for people who wish to provide for the care and support of their pets.
- Life insurance trusts (ILIT)
Revocable Living Trusts
Revocable Living Trusts are documents, signed by a person known as a “Settlor,” who is the person who creates the trust. A Revocable Living Trust is a written document we call a “Trust” and is created for the benefit of beneficiaries. A trust must hold assets in order to work correctly. The Settlor designs the trust and decides who will benefit from the assets. Usually, the Settlor is the person who benefits from the trust assets during their lifetime. After the Settlor’s lifetime, the assets benefit the persons, organizations, charities, or pets as the Settlor decides in the amounts the Settlor decides when the Settlor decides.
The person who is in charge of the assets is called the Trustee and may be allowed discretion to decide when to make distributions and what amounts to distribute.
Trusts for minors, disabled beneficiaries, and pets can all be designed in a well-written Revocable Living Trust by adding a Special Needs Trust or a Supplemental Needs Trust.
Irrevocable Trusts are documents, signed by a person known as a “Settlor,” that holds assets. The difference between a Revocable Living Trust and an Irrevocable Trust is that generally, an Irrevocable Trust cannot be revoked after its creation.
Special Needs Trusts
Special Needs Trusts (also known as “Supplemental Needs Trusts”) come in different varieties. Generally, a Special Needs Trust holds assets for the benefit of another person who is a minor, too young to inherit in the opinion of the person making the Trust, or a person who is incapacitated and unable to handle their finances.
A Trust for a minor or incapacitated person is one kind of Special Needs Trust. The Trust holds assets for a beneficiary under a certain age, so they do not inherit too young, or if a person is unable to manage their own finances. It is up to the person making the trust to decide what age is too young, as opinions differ, but some people believe 21, 25, age 30, or even older is too young. I advise that a discussion about the beneficiary’s level of maturity, education, ability to act responsibly are all factors to consider when designing a Special Needs Trust.
Grandparents and parents can create Special Needs Trusts for their children, grandchildren or other beneficiaries. The person making the trust decides who will be in charge of the assets, what assets will go into the trust to benefit the beneficiaries, and when the beneficiaries should receive the benefit of the assets. The person who is in charge of the assets is called the Trustee and may be allowed discretion to decide when to make distributions and what amounts to distribute.
There is another kind of Special Needs Trust as well – a trust that is created by a person who is under the age of 65, disabled, and the Special Needs Trust is funded with assets owned by the person making the trust for the benefit of the person making the trust. The intent is to allow the disabled individual who is under the age of 65 to use the assets in addition to the government benefit for which they are qualified. The trust must provide that, upon the death of the beneficiary, the State of Oregon’s Medicaid program is reimbursed to the extent the program provided benefits to the disabled individual.
Creating a trust and funding it with assets to protect your beloved pet can be a great relief to a pet owner. Pet Trusts provide for the financial and emotional support and maintenance of a pet and makes sure a trusted individual will be there for your pet when you can no longer take care of them.
A Power of Attorney is a document you sign and you designate who will be in charge of your assets. The maker of a Power of Attorney is called a “Principal.” The person appointed with the authority to make financial decisions on your behalf is called the “Agent.” A Power of Attorney only works during your lifetime.