Most people have heard the terms “beneficiary” and “heir” used often. Unfortunately, they are often used interchangeably, when in fact they have distinct legal definitions. If you are a Milford resident who is in the process of planning your estate, or are considering doing so in the near future, an understanding of both terms may be useful.

Although each state defines estate planning terms, most states use a very similar definition of the terms “beneficiary” and “heir.” Both terms are frequently used when drafting a Last Will and Testament.

A beneficiary is someone who receive a bequest in your Will. The bequest may be cash, property or any other estate asset. What defines a beneficiary is that he or she is specifically mentioned in the Will as receiving something from your estate. For example, if you give your son Charlie your house in your Will, then Charlie is a beneficiary. Likewise, if you give your best friend Mary $10,000 in your Will, then Mary is a beneficiary.

A heir, however, is someone that stands to inherit under the laws of intestate succession. Intestate succession laws kick in in the event you die without leaving behind a valid Will. Intestate succession laws also apply when you fail to devise all of your estate through your Will. Although laws will vary among the states, heirs are usually your spouse, children, parents, siblings and other blood relatives.

A person can be both an heir and a beneficiary. In the above example, your son Charlie is both an heir, because he is your son, and a beneficiary because you specifically mentioned him in your Will.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

One of the most common questions asked with regard to Wills and Trust is “what happens when a person dies and they didn’t have a Will?” The simple answer to that question is that the state’s intestate succession laws will govern the disposition of the decedent’s estate. Although individual state laws may vary somewhat, the basic concept of intestate succession is the same among all states.

The main purpose of executing a Last Will and Testament is to legally decide how you want your estate assets to be disposed of upon your death. If you do not execute a valid Will prior to your death, then you are said to have died intestate and therefore the state’s intestate succession laws will determine what happens to your estate assets. Intestate succession laws can also apply if a valid Will was, indeed, executed, but failed to dispose of all estate assets. For example, if you executed a Will which specified what you wish to happen to all of your property, except you forgot about a bank account and did not include a residual estate assets provision in your Will, then the funds in that account would be disposed of according to intestate succession laws because your Will failed to account for their disposition.

Intestate succession laws create a hierarchy of heirs who stand to inherit from your estate. In most states, at the top of the hierarchy are your spouse and children. What proportion they inherit will vary by state. If there is not spouse or children, then the law typically looks to other blood relative, such as grandchildren, parents, or siblings as heirs of your estate.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you are in the process of creating an estate plan, or already have one in place, you may also be considering the need for an incapacity plan. Incapacity can strike at any time and for any number of reasons, making the need for an incapacity plan equally as important as an estate plan. Although you do not need to make an entirely separate incapacity plan in most situations, you do need to discuss your desire to incorporate incapacity planning tools into your estate plan with your estate planning attorney.

The principal goal of an incapacity plan is to avoid a scenario where a family member or loved one is forced to petition a court in order to ascertain control over your finances or make healthcare decision on your behalf in the event of your incapacity. Absent pre-planning, that is precisely what is likely to happen.

Many estate planning tools can also be used as incapacity planning tools. Converting titles to real property or ownership of financial accounts, for instance, can serve the dual purpose of giving your loved one immediate access to the property or account upon your death and allowing them access in the event of your incapacity. A power of attorney can also be used in the event of your incapacity if it is a durable power of attorney. Trusts are also commonly used when creating an estate plan. A trust can often function as an incapacity planning tool as well by simply adding your incapacity as a triggering event which shifts control of the trust assets to the trustee.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you die and leave behind a Last Will and Testament, it is typically required to be admitted to a probate court for administration. Once the will has been admitted, interested parties are allowed to file a will contest if they feel that have grounds to do so. State laws vary with regard to what grounds can be asserted to contest a will and who may file a will contest; however, if a will contest is successful, the will is declared invalid and the assets distributed according to the laws of intestate succession.

In many states, only a beneficiary or heir may file a will contest. This includes anyone specifically mentioned in the will as receiving something or anyone who would otherwise inherit if no will existed. The person filing the will contest must give a valid legal reason for contesting the will as well. Being left out of a will is generally not a legal reason for contesting a will. Valid legal grounds for a will contest are often things such as the testator lacked the mental capacity to sign the will or was under duress at the time the will was executed.

If the petitioner is able to prove his or her case to the court, then the court declares the will to be invalid. Once a will is declared invalid, it is as if the will never existed. At that point, the estate assets are distributed according to the laws of intestate succession in the state where the will is being probated. Intestate succcesion laws also vary by state; however, the spouse, children and other blood relatives typically inherit the assets under intestate succession laws.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you are part of a blended family, you are not alone. Blended families have become the majority in the United States over the last several decades. Creating harmony within a blended family is often difficult. Developing an estate plan for your blended family may seem outright impossible without creating discord. Aside from the emotional aspect of discussing your estate plan with the various parties, you must take into account the wide array of state and federal laws that pertain to probate, wills and trusts, and retirement plans. By taking the time to consult with an estate planning attorney, you can avoid some of the common pitfalls encountered when estate planning for a blended family.

Undoubedly the biggest, an most easily avoided, pitfall of estate planning for a blended family is failing to create a plan. Some people do not realize the importance of creating an estate plan while others simply wish to avoid the potential discord that may result from discussing an estate plan. Even if you do not have a substantial estate, estate planning for a blended family is particularly important in order to ensure that all the parties are protected and your wishes carried out in the event of your death.

Another common pitfall is failing to review the terms of your divorce decree when appropriate. Often, a divorce decree requires you to include specific provisions in your estate plan. Be sure to locate a copy of the decree and allow your estate planning attorney to review it when discussing your estate plan. Finally, state and federal laws must be considered. Creating an estate plan that does not comply with applicable laws may be worse than not creating a plan as it could result in your estate spending months, or even years, in probate court until it is straightened out.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Both the concept of estate planning and the concept of retirement planning have been around for centuries in varying forms; however, the complexity of both retirement and estate planning is something that has only recently evolved. Due to the complexity of many estate and retirement plans, you should consider reviewing both with your attorney to be certain that you are receiving the maximum benefits from each plan.

Retirement planning for our grandparents was usually a simple matter of depending on a generous employer sponsored pension and/or Social Security retirement. Likewise, estate planning was often accomplished by executing a Last Will and Testament and nothing more. Pension plans are rare these days, however, and the future of the U.S. Social Security system is in doubt. Retirement planning, therefore, has become considerably more complicated and often involves various investment plans, trusts and financial accounts. Estate planning has also changed over the years to include numerous tools such as trusts, joint ownership documents and powers of attorney.

The goals of both your estate plan and retirement plan are really not so different. Your retirement goal is generally to produce enough income to support yourself comfortably during your golden years. Ideally, you will have some of those assets left over upon your death. Your estate plan goal is then to distribute those assets upon your death. With creative planning, and consultation with your estate planning attorney, you should be able to create a retirement plan that works in harmony with your estate

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you are a partner or shareholder in a small business, you should understand what a buy-sell agreement is and how one operates. A buy-sell agreement is a small business estate planning tool that is frequently used to protect the business upon the death or incapacity of a partner or shareholder as well as to protect the financial interest held by the partners or shareholders.

Simply put, a buy-sell agreement is a legal agreement that sets forth the terms upon which your share of the business will be sold upon the occurrence of a triggering event — generally your death or incapacity. By executing a buy-sell agreement prior to your death or incapacity, you accomplish two important objectives.

First, the continuity of the business is assured. If you die, or become incapacitated, in the absence of a buy-sell agreement, your interest in the business becomes a matter for a court to sort out in many cases. In the meantime, the business may suffer and the value of your interest may decrease. By executing a buy-sell agreement, the legal status of your interest in the business is pre-determined. Upon the occurrence of an included triggering event, the agreement kicks in and the business can continue uninterrupted.

Second, a buy-sell agreement protects your own interest in the business. A buy-sell agreement is binding on the buyers as well as the seller. If you become incapacitated or die unexpectedly, for example, the other partners or shareholders will be legally bound by the terms of the agreement to purchase your interest in the business. The proceeds can then be used to take care of you or your loved ones.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you are concerned about your estate assets being tied up in the often lengthy probate process, one option available may be to convert accounts to “pay on death” accounts. This option is frequently available for bank accounts, retirement accounts, security registrations and even vehicle registrations in some states.

When you die, your estate assets must generally pass through the legal process known as probate. Probate rules vary by state, but the basic concept behind probate it to ensure that your assets are inventoried, debts and taxes paid, and the remaining assets distributed to heirs or beneficiaries. Probate can result in a long delay before your assets are available to your loved ones.

One tool used to avoid probate is to change the ownership status of accounts to a “pay on death” status. As the name implies, this simply means that in the event of your death, the assets held in the account are to be immediately paid to the person indicated on the account. Most bank accounts, as well as many investment accounts, securities accounts and vehicle registrations can easily be converted to a “pay on death” account by requesting the change. In most cases, all you need to do is request the appropriate form, designate a beneficiary and return the form to the financial institution or appropriate office. Upon your death, the designated beneficiary can then request the funds be paid out to him or her immediately without the need for the assets to be included in a pending probate case.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Estate planning is important for everyone; however, it takes on heightened importance for member of the gay, lesbian, bisexual and transgender, or GLBT, community. While the laws in some states are beginning to change, the vast majority of the laws in the United States do not recognize same sex marriages. As a result, many GLBT couples must be proactive when developing an estate plan in order to ensure that the surviving partner is protected in the event of the death of one partner.

Although most state laws do not recognize same sex marriages, that does not prevent a GLBT couple from using the myriad of estate planning tools available to include and protect each other in the event of the death of one partner. A Last Will and Testament is the cornerstone of most estate plans. Your will is your opportunity to dictate how you want your assets to be divided upon your death. In the absence of a valid will, the intestate succession laws in the state where you were a resident at the time of death will determine how your assets are handled. This typically means your assets will go to your spouse, children and other blood relatives. A will, however, will take the place of intestate succession laws as long as the will is drafted correctly. You may leave all, or a portion, of your estate assets to your partner in your will. You may also make specific bequests, such as items of particular sentimental value, to your partner in your will.

Along with a will, you may wish to consider titling property jointly. Real property can generally be titled as joint tenants with rights of survivorship, for example. Unlike tenancy in the entirety which requires the co-owners to be married in most states, this form of joint ownership can be used by anyone, regardless of the relationship between the co-owners. Financial accounts may also offer the option to make the account “payable on death” which allows you to designate your partner as the payee. Titling property jointly not only ensures that the property will be transferred to your partner, but also avoids the need for the property to pass through the often lengthy probate process in

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Creating an estate plan can be a complicated, yet necessary, project. Each estate plan is unique to the individual who is creating the plan; however, there are elements of estate plans that are commonly used. Trusts, for example, are frequently used as part of an estate plan. Understanding the benefits and limitations of a trust can be of great help to you during the estate planning process.

A trust is a legal agreement created by a grantor. Other names for a grantor include trustor, settlor and makor. As the grantor, you must designate assets that will be used to fund the trust. A trustee needs to be appointed and beneficiaries named who will benefit from the trust. Aside from those basic elements, trusts can differ significantly in both function and form.

A trust created as part of an estate plan generally offers three common benefits. First, a trust allows the grantor to retain a significant amount of control over the assets even after death. Second, a trust allows the beneficiaries access to the trust assets or benefits without waiting for the grantor’s estate to pass through probate upon death. Finally, some trusts also avoid payment of estate taxes. An irrevocable trust, for example, legally transfers the trust assets upon creation out of the name of the grantor, meaning the trust assets are not legally owned by the grantor upon death. Since the trust assets are not legally owned by the grantor, they are not subject to the estate taxes paid upon the death of the grantor.

Individual state laws control the formation and administration of trusts. As a result, you should consult with an experienced estate planning attorney prior to the creation of a trust to be certain that you understand any legal limitations placed on trusts in the state where you reside. In addition, in order to receive the maximum benefits out of a trust, you may need to make the trust irrevocable, which limits your options regarding control over the assets once the trust is created. Once you have created an irrevocable trust, you are locked into the terms of the trust except under certain

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.