Yes, the leaves are turning color, the temperatures are cooler, and the days are getting shorter.

It’s also time that we turn our attention to those issues that deal with the fact that our days are getting shorter and that changes are inevitable.  If our lives were like our cars, we’d be checking our tires, fluid levels and the miles left before we should change the oil.

Your Will as a Guide
Do you know where the original copy of your Will is?  Hopefully, it is in a safe place but readily accessible.  Also, does your executor have a copy readily available?

It is still a good rule of thumb to review your Will every 5 to 7 years, so you can manage the changes which have taken place over that period of time.  Assets may have been used up, beneficiaries may have died and new should-be beneficiaries were born.

While it’s not “family friendly” to use your Will to show favoritism, it is highly unlikely that the financial circumstances of all your named beneficiaries are the same.  So, do you fashion your Will so that one size fits all?  Or do you manage the distribution of your assets to meet the particular and personal needs of your beneficiaries?  These are questions which can be answered through your Will.

Another concern:  Might such an uneven gifting policy be misunderstood by some beneficiaries?  Of course! Even the best of intentions will be misunderstood by someone.  That’s why it’s important to communicate with your beneficiaries either during your lifetime or by letter after death – to explain why you are doing what you are doing.  Not everyone may agree, but everyone should know that your property with which you have been blessed during your lifetime is yours to do with as you see fit.

What is a Will?
Simply put, a Will is a written document that disposes of the deceased‘s property after that person dies.  To be ruled valid by a judge during the probate process, the Will must be signed by the person whose property it affects and it must be signed by two or three witnesses who attest to the mental state of the testator and that he/she actually signed the document.

Caveat:  Some estate planners regard a Will as the waste basket of estate planning.  Why?  Because, contrary to popular belief , very few assets are actually disposed at death under a Will.  Again, why?  Because there are different types of property ownership titles that avoid both disposition under a Will and probate through the court.

You can’t give something away which you don’t legally own, even though you were free to use and/or abuse that property while alive.  Whether you actually own it or not depends on where your legal residence is.  There are nine community property states:  AZ, CA, ID, LA, NV, NM, TX, WA and WI.  In these states property is either separate property or community property.

Separate property describes those assets owned by a single, divorced or widowed person, or the assets of a married person that were acquired before marriage or during marriage by gift or inheritance.  Simply because only one spouse is listed on the title does not necessarily mean that the asset is separate property.  To confuse matters even more, in community property states the separate property of one spouse can be so co-mingled with their community property to the end that this separate property is no longer traceable and it becomes community property.

Community property can exist only during the marriage.  At the moment of death of either spouse the property becomes separate and one-half is owned by the deceased spouse and one-half is owned by the surviving spouse.  Any property inherited by the surviving spouse from the deceased spouse becomes the separate property of the surviving spouse.

Another important – and potentially troubling – aspect of community property is that each spouse may transfer at his/her death his one-half interest in any community property to someone other than the surviving spouse.  While this split ownership does not adversely affect the surviving spouse’s ownership of the property, it can cause embarrassing situations which may, in turn, cause hard feelings among all parties concerned.

Marital property are those assets acquired during marriage by spouses in non-community property states (the other 41 states).  While it is important to distinguish between community property and separate property,  the three kinds of ownership are essentially the same.

While a Will may not always accomplish what you think it should because of your not fully understanding the different types of ownership, having a Will definitely is an invitation to settle everything in probate court.  Probate is the court supervision of the distribution of a deceased’s assets to his/her beneficiaries or heirs.  Probate exists because it’s the only way to change the title to assets from the deceased person’s name to the person(s) under a will, or to the heirs by intestate succession, if there is no will.

Unfortunately, there is a hefty price tag to this procedure.  It is estimated that it costs a person’s estate 5 to 7 % of the total value of the assets that pass to one’s heirs through the probate court.  Do the math yourself on the projected value of your estate: multiply that figure times 5%, then 7%.  These two figures represent the range of cost for this probate procedure that must be paid from the overall value of your estate.
Someone once described Probate as an expensive toll gate.

A Better Way?
When it comes to estate planning, there is no one size fits all.  The would-be planner needs to weigh many different factors in deciding how to structure his/her personal estate plan.  It is important to understand and coordinate one’s  total estate plan.

Although inter vivos(during lifetime) trusts (also called “living trusts”) have been around for many years, they have only become commonplace in the past 30+ years.  The primary purpose of the inter vivos trust is to avoid an expensive probate.  This trust can act as a Will substitute by holding title to your assets during your lifetime.  Therefore, the probate court need not become involved because the trust, not you, legally owns the assets.

No probate fees, less work for your executor who may also serve as your successor trustee, and more value to be passed to your beneficiaries.  There’s a lot more to be said in favor of inter vivos trusts, so we’ll leave that as a topic to be explored further in our February 2013 newsletter.

Looking Back at 2012
2012 has been a wonderful year for Ananda and the Janaka Foundation, with a number of people committing themselves to supporting Ananda’s ministries and programs through gifts from their estates. In fact, the number of estate gifts has quadrupled in number since  2006.

Forty-five people attended our annual Janaka Legacy Fellowship tea, held during Spiritual Renewal Week at Ananda Village. During the tea we enjoyed a wonderful time with Swami Kriyananda who came and talked with us for almost an hour.
We hope many more of you will be able to join us in 2013, both as members of the Janaka Legacy Fellowship and for our annual tea.