Estate planning helps people anticipate and arrange for the care of their loved ones, the management their property if they become incapacitated or disabled, and the efficient, cost-effective distribution of their assets after they are gone.
What are the benefits of estate planning?
A properly designed and implemented estate plan allows you to:
• Ensure that your minor children will be raised according to your wishes if something happens to you.
• Ensure that you have control over your assets if you become incapacitated.
• Leave what you want to whom you want in the manner you want after you pass away, and do it in the most cost-effective manner to minimize fees and expenses.
• Protect your assets against creditors, lawsuits and other threats.
• Pass your work ethic, values and sense of responsibility to heirs.
• Significantly reduce estate, income, gift and other taxes.
• Ensure that your financial affairs and information about your family remain private.
• Protect your heirs’ inheritances.
• Leave a lasting legacy and impact on others.
What is probate?
Probate is the legal process by which the property of a person who passes away is inventoried and distributed according to the decedent’s will and state laws. Probate can be time-consuming, frustrating and needlessly expensive. It can be avoided by placing assets in a properly designed and implemented living trust.
What is a will?
A Will is a legal document that outlines how estate assets are distributed and minor children cared for following a person’s death. Having a will does not avoid probate.
What is a living trust?
A living trust is an effective estate planning tool that is used by a person to hold property during their lifetime and also distribute property at time of death. A living trust is often referred to as a “revocable” living trust because you can make changes to the trust during your lifetime. A properly prepared living trust can avoid public, costly and time-consuming court processes at death (probate) or incapacity (conservatorship). A trust can allow you to provide for your spouse without disinheriting your children, which can be important in second marriages. It can also minimize estate taxes, keep your financial affairs private, and protect inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.
What are powers of attorney?
These are legal documents that allow you to choose, in advance, who can make medical and financial decisions on your behalf in the event of incapacity. Medical decisions are made by your health care power of attorney. Financial decisions are made by your financial power of attorney.
What is a living will?
This is a legal document detailing what types of medical treatment can and cannot be used (such as a breathing tube) to keep an incapacitated person alive in an end-of-life situation.
Is an estate plan necessary?
You don’t need to have an estate plan of your own since the state automatically has rules for how assets are distributed when you pass away. However, virtually everyone stands to benefit from estate planning. At the most basic level, an estate plan allows you to control your assets if you become incapacitated and control “who gets what” after you pass away. Estate planning can minimize the impact of taxes, professional fees and court costs. Your plan can help you accomplish a number of other important goals as well, like making sure your loved ones are taken care of according to your wishes. (See the benefits of estate planning above).
Does a living trust protect assets against the high cost of nursing home care?
No. However, a number of other tools and strategies can do so, including irrevocable trusts, long-term care planning, Medicaid planning, veterans benefits and more.
Do you need to be a millionaire to have a trust?
No. Given that a living trust can avoid the delays, cost and frustration of probate, you don’t have to be rich to benefit from having one. Many people use trusts to help hold assets in the event of incapacity such as dementia, disability or other causes. Every situation is unique. If a living trust is not right for you, we can design an effective plan without one.
How much does it cost to set up a living trust?
A living trust costs more than a will, but it avoids the needlessly expensive probate process and it provides greater control over your assets while you are alive and after you pass away. We will explain the cost of a living trust and all of our other services up front so there will be no “unpleasant surprises” at the end.
Can changes be made to an estate plan?
Yes. In fact, changes should be made to your plan whenever your medical, financial or family situation changes dramatically, or when the laws themselves change.
How often should an estate plan be reviewed?
We recommend that every plan be reviewed at least once every three to five years. Your plan should also be updated if there have been important changes in your health, financial situation and/or family.