Wills: A will is a legal document that dictates how your property is to be distributed after your death. In Kansas, a valid will must comply with these requirements:
— The maker, called the testator, must be at least 18 years old.
— The testator must be of sound mind at the time the will is prepared.
— The will must be properly prepared and signed by the testator.
— The will must be witnessed by at least two people who will not receive any property under the provisions in the will.
— A notary public can also sign, making a “self-proving” will; however, the witnesses are still required, and the notary public must make a special certification if the will is to meet requirements.
A will should name an executor who will administer and settle the estate. The job includes paying all debts and taxes out of the estate assets, as well as distributing the estate according to your wishes. It is always best to name an alternate executor to serve in the event that your first choice cannot serve.
Generally, Kansas law allows you to distribute property as you desire. One major restriction is that a spouse has an absolute right to at least half of the estate.
Is the will is written to give a spouse less than half, then that spouse must have agreed to the smaller share of the estate in the in the manner provided by law for the will to be valid as written.
A will that meets all of the requirements of Kansas law is good until it is changed or revoked by the maker.
This may be done by writing a new will or by writing an amendment to your current will. The document must be signed with all the formalities of the original will. You may revoke your will by burning, tearing, destroying, or marking through it with the intent of revoking it. Events such as marriage, divorce, and birth or adoption of a child also have an effect of your will. You should review your will every few years to make sure it reflects your wishes currently.
If you die without a valid will, which is called dying interstate, all of your property, other than what is held jointly will be divided into various portions depending on whether a spouse, child(ren), parents or other relatives survive.
An estate tax is imposed by the federal government on the value of all property owned at death over the amount set by the federal government. Various deductions are subtracted from your gross estate in order to determine the amount of your estate that is subject to federal estate tax.
The state of Kansas imposes an estate tax only on estates subject to federal estate tax. The amount of such tax is equal to the amount of the maximum credit allowed by section 2011 of the Internal Revenue code against the tax imposed by that section.
Trusts: A trust is a legal arrangement made during your life where property is held by one person for the benefit of another. The person creating the trust is called grantor. The person who manages the trust is called trustee, and the person who receives benefits from the trust is called the beneficiary.
The terms of the trust are written out in a legal document known as a trust instrument. It looks a lot like a will and contains written instructions for what you want to happen to the trust property if you become disabled or die.
A living trust takes effect during the grantor’s lifetime. The grantor usually serves as the trustee. Because title to the property is transferred from the grantor to the trust, the property does not pass through probate. However, the establishment of a living trust does not deprive the grantor of control of his or her property. Upon the grantor’s death the property automatically passes to the beneficiary.
The primary advantage of the living trust is that the trust is not subject to probate on the death of the grantor. The living trust also offers protection if the grantor becomes disabled. Because the property is titled in the trust, someone else called the successor trustee can step in and take over without delay.
Some people are attracted to the living trust because it is private. Unlike a will, your trust is not required to be filed with the probate court upon your death. Therefore, the assets of your estate plan remain private.
Living trusts are often set up to avoid probate and for tax purposes. If the grantor needs Medicaid due to nursing home costs, many trust documents will prevent the grantor from receiving Medicaid.
Changes in federal law severely restrict the use of trusts for KanCare long term care beneficiaries. Transfers of funds from a trust are subject to a 60- month ‘look back’ period creating potential ineligibility for five years from transfer.
Assets of a KanCare long term beneficiary put into a trust for the benefit of an individual or the spouse are considered available regardless of trust purposes or discretion. Both the cost and complexity of living trusts may make them undesirable. The decision as to whether a trust is right for you can best be made by consulting with your attorney.
Information for this article was received from the Kansas Department for Aging and Disability Services Resource Guide.
The McPherson County Council on Aging offers free legal advice through Kansas Legal Services. Call 620-241-4383 for your appointment.