What Is Estate Planning?
An estate plan is a set of legal documents and techniques that work in tandem to protect an individual and their family, during their lifetime and when they are not around. Fundamentally, estate planning allows a person to protect their assets, designate medical and property decision making power, select who receives their hard earned belongings, and minimize the tax burden of passing down wealth. It secures peace of mind for not only the person doing the planning, but also for the beneficiaries of their estate. The coordination of legal documents, such as those listed below, are necessary to create a thorough estate plan.
- Wills - How will you distribute your assets?
- Trusts - Do you want to protect your assets while living, avoid the difficulties and expenses of probate, limit the tax burden of your estate, etc...?
- Powers of Attorney - Who do you want to control your assets and healthcare decisions, if you are incapacitated?
- Living Wills - How do you prefer to be treated, when death is imminent?
Why Is Estate Planning Important?
These documents come into play when things are in chaos. Not only does an estate plan clear things up for the courts, but more importantly for your loved ones.
Protection While Living
Firstly, you need to protect your hard earned assets from creditors and litigants. Certain lines of work, such as medical and legal, expose a family more than others. Owning a business can create additional liabilities. Therefore, depending on your personal and professional liability, creditors and litigants may be able to attack what you have. Properly structuring title to your assets and designing Trusts can greatly reduce your exposure.
Additionally, you need to protect yourself if you are no longer able to make sound decisions. Designating Powers of Attorney for healthcare and property allows someone you trust to make decisions on your behalf. You need to help your agent by making your preferences abundantly clear. Conflicting language often confuses your agents, and obstructs essential decision making. For healthcare choices when death is imminent, you can spell out your wishes in a Living Will. For other cases such as disability, you will need to give thorough guidance in your healthcare power.
Not only are your healthcare decisions important, but who will take care of your property? Taxes and bills need to be paid, business decisions need to be made, and properties must be managed. You need to designate a responsible person that you trust who is willing to take on these tasks. Even in the simple case of assigning control to your spouse, some accounts may be inaccessible due to how they are held. This can introduce the difficulty of petitioning the court for Guardianship.
Expedite Probate Administration
Without an estate plan, the probate process can become very costly and time consuming for your heirs. The rules for transferring a decedent's assets will be determined by legal protocol at the time. Imagine knowing who will get your property long before your passing, but a recent change in the law alters what will actually occur. You have ceded control to the courts.
Without a cohesive estate plan and Will, litigation by heirs, potential beneficiaries, and creditors may be possible. Consequently, these Will Contests slow down the process, and dramatically increase the toll on your family. A clear and precise estate plan will limit confusion in the court administration process.
Read more about Probate Administration
Prevent Guardianship Battles
With minor children, you want to choose who will take care of them. You do not want your family or friends in costly court fight, especially with your children in the middle of it. In addition, the assets that you have given to your children need to be protected from potential misuse.
As an adult, if you were ever to become mentally incapacitated, you would need a guardian to take care of you and keep your property in working order. This person(s) will have the authority to make your healthcare decisions, and decide how spend your money to your best interest. With the use of Powers of Attorney, you can assign control to people you trust.
Whether someone is fighting to be the guardian of an Adult or a Minor, the battle tends to be very personal with few concessions. Thus, a litigation slows down crucial medical decision making, introduces expenses with court appointed guardians, and potentially weakens the assets of the ward. Read more about Guardianships
Limit Death Taxes
The smaller the tax burden, the larger the estate. This is why the most common assumption for needing an estate plan is to reduce taxes upon death. Transferring more assets after your death allows you to fulfill your wishes of helping the people and organizations you care about.
The goal is to minimize your Probateable assets. By learning your intentions for your hard earned money, we can design a plan to accomplish those goals with minimal taxation. The plan may include scheduled gifting, designing Trusts for your beneficiaries, changing title of real property, and much more. This is one of the reasons why estate planning is inherently personal. Everyone wants to pay fewer taxes, but knowing your goals allows us to custom tailor a game plan for transferring your wealth.
Personal and Unique
For estate planning to be effective, it must not only be comprehensive, but also personal. An estate plan can vary by the line of work someone is in, how they hold title to assets, long term goals, marital status, etc... Some basics to think about are as follows:
Who do you want to have you hard earned assets? How can your beneficiaries use the money? If you are incapacitated, who do you want making your medical decisions? Who do you want to manage your property? What are your medical decision preferences? Who will take care of your minor children if you are no longer around? Can my death taxes be reduced?
Determining the answers to these and many more questions is crucial in creating a personalized estate plan.
Accessibility and Focus
We believe that estate planning should be accessible to everyone. Many people think that they don't "have an estate" because their assets aren't massive. It's not just about assets, it's about you and your loved ones. You are unique, and so should be your estate plan. Using our extensive estate planning, probate, and guardianship experience, we will construct a comprehensive and personal plan that you can be confident in.
We strive to create long-term relationships with our clients and their families. Personal situations change frequently. Whether it is having a new child, starting a business, or the loss of a loved one, we will always be here to help. We would be honored to be your estate planning resource for years to come!