How Long Does It Generally Take To Create An Estate Plan?

The length of time it takes to form an estate plan depends on multiple factors. For example, in our office we have our own set of protocols as to how we work with our clients to create documents. In our practice we have an extensive questionnaire that we have our clients fill out and then we sit down with them to review all of that information in order to determine what documents they ought to prepare, to incorporate all of their instructions and intentions. Once we are hired to prepare documents then we’re going to use the information from our questionnaire as well as the meeting to prepare initial drafts of those documents then we’re going to send them to our client to have them review and read them on their own.

We do this intentionally, first and foremost, because we don’t want clients signing any documents that they’ve never read before. Secondly, we don’t want client signing documents they don’t understand. Once our clients have had the opportunity to review their documents we contact them to review the documents together, answer questions, make changes, make sure that they’re comfortable with signing a document, and then we would meet to formally execute the documents. From beginning to end the process is somewhere between three and five weeks. A lot of it depends upon how long it takes our clients. We’re very computer oriented here. Once we’re hired to produce documents we’re able to produce them within three to five business days.

The ball then shifts to the client’s court as to how quickly they review what we’ve prepared and how many drafts we need to go through to make sure they’re comfortable signing documents. It just depends on the client and how quickly they want things to be done but three to five weeks is a general rule, if you will.

What Are Trusts?

A trust is a business entity created by one person or several people called the settlors to which they are appointing trustees to undertake the instructions and the discretions created in the documents creating the trust. There are many types of trusts that a person can create during estate planning. The most common trust that we prepare in our office is commonly called a revocable living trust. These are trusts that are created by one or more people (typically a married couple) who are providing for themselves as the initial beneficiaries of the trust and are appointing themselves as the trustees. The real reason they’re doing this, more often than not, is for probate avoidance purposes, namely to avoid any court involvement in the administration of the trust assets both during the lifetime of the creator(s) of the trust as well as the distribution and management of the assets after the creator(s) of the trusts die. These types of trusts are simply wrappers around the assets that the creator has contributed to the trust during their lifetime. There are no separate tax returns that need to be filed by the trust. The identifying number for all accounts that are opened in the name of the trust remain the social security number of the creator of the trust. They are called disregarded entities by the Internal Revenue Service and state taxing authorities.

Aside from revocable living trust there are trusts that can be created for the purpose of asset protection for purposes of Medicaid planning or other types of creditor protection. In order to get that benefit those types of trusts have to be irrevocable; meaning they generally can’t be changed in any material ways once they are created. It is different from a revocable living trust which means that these trusts now become their own entities as far as the Internal Revenue Service and taxing authorities are concerned; therefor, they are required to file income tax returns each year. It doesn’t mean that the trust is paying the tax but, there are return requirements that need to be done. Another requirement in the context of irrevocable trusts is that the creator of the trust is generally not permitted to be the trustee of the trust in order to get the protections they’re seeking to get out of them. Those are two requirements that a person has to accept in order to create these documents.

For more information on Timeline To Create An Estate Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (703) 492-9955 today.