An estate plan is a collection of legal documents that outlines how you want your assets to be divided when you die, and how you want people to make financial and health decisions if you can’t do it for yourself during your lifetime. This is because the most important part of estate planning is to designate heirs for your assets, whether it’s a summer home or a stock portfolio. Without an estate plan, courts will often decide who gets your assets, a process that can take years, incur costs and become ugly.
Estate planning is the process of mapping out how your property and assets will be distributed in the event of your death. An effective estate plan usually focuses on who will inherit your assets and often includes a detailed plan for end-of-life health decisions, in case you can’t make these decisions for yourself. It is also intended to minimize the tax burden for those who inherit their assets. All financial accounts and policies, such as retirement savings accounts and insurance policies, with designated beneficiaries will pay out money to those beneficiaries, regardless of what your will or estate plan says. Make sure your beneficiaries stay current and in line with the wishes in your estate plan, especially after a birth, marriage, or other major life change.
In 2008, Congress recognized the need for the public to understand the importance and benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. However, according to a 2019 survey conducted by Caring.com, 57% of adults in the United States have not prepared estate planning documents, such as a will or trust, although 76% considered them important. Many of the respondents said this was due to procrastination, but many others mistakenly believed it wasn’t necessary because they didn’t have many assets. Trusts are sometimes misunderstood and used interchangeably with wills, but in fact it is a legal arrangement involving 2 parties, where one person (a “trustee”) holds legal ownership for another person (a “beneficiary”). Often used in estate planning for families and businesses, the trustee has the authority to manage and manage beneficiaries’ finances when they consider the beneficiaries to be financially mature. While the threshold is currently high, at over $11 million, there are plans to lower it significantly.
This can be your home or other real estate, but also your car, investments, life insurance, furniture or other personal belongings, and even your checking and savings accounts. An experienced estate planning attorney can help you and your family members create a customized estate plan to meet each of your unique needs and carry out your wishes, or help you update a pre-existing estate plan. In the event that you become incapacitated for work, a doctor is responsible for making medical decisions on your behalf. If you are performing a medical guideline and a health care power of attorney while you still have capacity, you can specify an “agent” (i.e., spouse, family member, or friend) to make these decisions for you, rather than relying solely on the doctor’s judgment. A medical guideline also allows you to tell your agent and doctor under what circumstances you want the life support procedures to be stopped (i.e. if you are in a terminal state and are out of life in 6 months or in a coma or persistent vegetative state). If you were to die today, would your spouse be able to continue making mortgage payments, funding your children’s education, and generally supporting themselves?
An irrevocable trust, a special trust that, for example, acts as the owner and beneficiary of one or more life insurance policies, is not subject to inheritance tax. You can’t change the content or beneficiary once it’s completed, but you can make sure the trust is excluded when your estate is calculated. If you plan to pass on your estate to your loved ones after your death, the estate planning process can help you reduce the impact of taxes on your assets. Without a succession plan, you run the risk that the court will decide on the fate of your assets. This process, known as legalization, can take weeks or months to resolve. Careful estate planning can help minimize your family’s financial stress after your death.
If your will goes to the succession, it becomes public, meaning anyone can access it. If you prefer to keep these things private, you should run a revocable trust that transfers all your assets while you are still alive. This prevents your financial information and skifteretsattest dødsbo intended beneficiaries from becoming public records, which can be a cause of tension between family members. Protecting your assets is an important part of estate planning with your attorney. This can help protect your estate if a lawsuit arises in the future.
In the absence of a power of attorney, it is an expensive and lengthy legal process to administer custody on your behalf. Establishing a power of attorney in your estate planning can help you avoid such a situation. Put yourself in their shoes and keep in mind that few people are eager to dwell on the subject of their own death. One way to start the conversation is to first talk about the need to plan illness and give instructions in case they get too sick to communicate with doctors or handle financial matters on their own. The conversation can, of course, turn into the interest of having an estate plan that allows your assets to be transferred as they wish, provide care for any dependents or pets, and minimize taxes, court fees, and legal fees. Communicate that you are not trying to control your decisions, but simply want to make sure that your own wishes regarding your health care and property are known and that all of your instructions are in writing to ensure they are carried out.
For example, life insurance quickly gives your beneficiary a death benefit after your death. Estate planning is the process of organizing your personal and financial affairs to deal with the possibility of future mental incapacity or death. One of the most important elements of estate planning is leaving your heirs with easy access to the assets you want to pass on to them. Estate planning isn’t just for the rich, and it doesn’t have to be an overly complicated or expensive process. An experienced estate planning attorney, also known as a trust and probate attorney, can work with you to create an estate plan that is customized to your needs, financial matters, and family situation.
Do you have enough life insurance coverage to ensure the well-being of your loved ones? Your estate plan can ensure proper treatment of your assets, including the treatment of your life insurance income, and can protect the future of your loved ones. The simple exercise of simply listing one’s wealth, income, and goals is a good example of being proactive. Once this is done, the next step of meeting with a qualified wills, trusts and probate and elder law attorney becomes a less daunting and more redemptive experience. It allows people to sit in the driver’s seat and take control of their situation and future decisions. If you haven’t taken the time to review your estate plan, beneficiary designations, assets, and income, I recommend doing so now.