Estate Planning Case
1) Yes, Latafat does need a will. He needs it so that he can control the distribution of his property and assets at death. If he were to die without a will, the state’s intestacy laws would go into effect ( The distribution scheme provided by each state for those individuals that die without a valid will).
2) Common features that need to be incorporated into a will are:
• Introductory clause to identify the testator,
• Establishment of the testator’s domicile & residence,
• Identification of the spouse & children of the testator,
• A declaration that this is the last will & testament of the testator,
• Revocation of all prior wills & codicils by the testator,
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Now, he can avoid this if he can prove he acquired the property before their marriage. Other problems can be avoided, like the joint tenancy property as long as Latafat’s wife acts in their family’s best interest and not greedy once Latafat dies.
4) A living trust is only necessary because Latafat doesn’t state how he would like debts or taxes he might owe be paid. I he has a substantial amount, using the probate process could be very expensive (5%-6% of the value of the probate estate in some states). Through a living trust, Latafat could manage and have control of his assets while he is still alive, while the will is for his death.
5) Both of Latafat’s children are minors so they would not be permitted to own property. However, it can be put in a trust for the minors benefit.
Special provisions to consider:
• Asset management Trust for minors: You can leave a bequest in a trust to be used to pay for the support and education of your beneficiary (example: grandchild). Once the grandchild reaches a designated age such as 22 years old, he/she could receive the balance outright.
• Support Trust for a family member: You can leave a bequest in a trust to be used to support and pay expenses of a family member such as an adult child. This is often used when a child does not handle funds well and would squander his/her inheritance. Such a trust would have the trustee be the caretaker of the funds and use discretion as to when and how the funds should be spent.
• Income for life trust: You can leave assets in a trust where the beneficiary would receive all of the income earned on trust assets, but the principal would remain in the trust. Upon the death of the beneficiary, the balance would then go to whomever you have designated. This type of trust is often used in a second marriage situation where you...