Estate planning is a process to consider alternatives for, to think through, and to set up legally effective arrangements that would meet your specific wishes if "something happens" to you or those you care about.
Good estate planning is more than "just a simple Will". Estate planning also typically minimizes potential taxes and fees, and sets up contingency planning to make sure your wishes regarding health care treatment are followed.
On the financial side, a good estate plan coordinates what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a pension plan), and other property in the event you became disabled or if you die.
On the personal side, a good estate plan includes directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you select would do that for you and know when you would want them to authorize "heroic measures" and when you would prefer they "pull the plug".
What Is An Estate?
The term "estate" consists of all the property a person owns or controls, whether in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust, and all other monies that would be generated on the person's death, such as through life insurance. It includes:
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real property and things attached to it (houses, buildings, barns, etc.)
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all personal property (including automobiles, bank accounts, stocks and bonds, cash, furniture, jewelry, art, collectibles, retirement plan benefits, etc.)
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all businesses and business interests (sole proprietorships, partnerships, corporations, joint ventures, and the goodwill, inventory, tools and equipment, accounts receivable, and other business property, etc.)
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powers of appointment (the right to direct who gets someone else's property)
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life insurance, pension benefits, and pension plans, all debts and obligations owed to others
Who Should Have An Estate Plan?
You should have an estate plan if:
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you are the parent of minor children
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you have property that you care about
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you care about your health care treatment
If you do not have minor children, do not care about your property, and have no concerns about your health care treatment, then you do not need an estate plan. But if you meet any of these categories above, you should have an estate plan.
When Should I Start My Estate Plan?
The only time that you can prepare and implement an estate plan is while you
are alive and have legal capacity to enter into a contract. If you are unable to manage your own affairs or suffer from some other disability which affects your legal capacity, your estate plan may be effectively challenged by those who assert that you lacked capacity at the time the documents were created, that you were subjected to fraud, coercion or undue influence during the creation and implementation of your plan.
The best time to start an estate plan is now, while you have the capacity to do so.
A Will
Sometimes called a " Last Will and Testament", is to transfer property you hold in your name to the person you want to have it. A Will also typically names someone you select to be your Personal Representative (or "executor") to carry out your instructions and names a Guardian if you have minor children. A Will only becomes effective upon your death and after it is admitted to probate.
"Durable Power of Attorney for Health Care"
Appoints a person you designate to make decisions regarding your health care treatment in the event that you are unable to provide "informed consent".
"Living Will" or "Directive to Physicians"
Is an advance directive which gives doctors and hospitals your instructions regarding providing or stopping health care treatment should you suffer permanent incapacity, such as an irreversible coma.
"Durable Power of Attorney for Property"
Appoints a person you designate to act for you and handle financial matters should you be unable or perhaps unavailable to do so.
"Living Trust"
Can be used to hold legal title to and provide a mechanism to manage your property. You can select the person or persons you want -- often even yourself -- as the Trustee(s) to carry out the instructions you want in the Trust. Unlike a Will, a Trust, usually becomes effective immediately, continues in force during your lifetime even in the event of your incapacity, and continues after your death.
Most Trusts are "revocable" which allows the person who creates the trust to make future changes, modifications and even to terminate it. (If the trust is "irrevocable", changes, modifications and termination are very difficult, although such trusts often carry some tax benefits). Trusts also help you avoid or minimize the expenses, delays and publicity of probate.
"Family Limited Partnership"
To own and manage your property, in a similar manner to a trust, but allowing additional tax planning techniques to be employed. Family Limited Partnerships are typically used for those who have large estates and thus have a need for specialized estate planning in order to avoid federal and state estate/death/inheritance taxes.
Should I Use A Lawyer?
Only an attorney who regularly practices in the fields of wills, trusts, probate and estate planning is able to provide you with really sound legal advice as you put your estate plan into place. Attorneys are subject to regulation by bar organizations, many of which have continuing education requirements and mandatory liability insurance in case the lawyer makes a mistake.
Our firm has a networking relationship with several established and trusted attorneys who can be at your service with respect to any of the above areas. Please contact our office for a referral, and we will work with you and your family to find the right fit for you. We will also be available to assist you with problems or questions as they arise during the creation of your unique estate plan.
Often the expense incurred in retaining an attorney to prepare and help you put an estate plan into place is worth hundreds of times what you and your family would pay with no planning or poor planning. It would also avoid the financial and emotional nightmares that can occur with a poorly drafted (or improper) plan.
Source:
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