Estate Planning, Simplified

Estate planning attorneys hear it all the time: “My children will have to figure it out,” “Everything will go to my spouse, right?” and “It’s just not a priority right now.” But then we read about famous people who don’t plan, and the family court battles that go on for years. Regular families also have this happen. We just don’t read about it.

A useful article from The Mercury titled “Estate planning basics and an estate attorney meeting preparation” reviews the basics of estate planning and explains how following the advice of an experienced estate planning attorney can protect families from the financial and emotional pain of an estate battle.

Estate planning is not just concerned with passing property and assets along to heirs. Estate planning also concerns itself with planning for incapacity, or the inability to act or speak on one’s own behalf. This is what happens when someone becomes too ill or is injured, although we usually think of incapacity as having to do with Alzheimer’s disease or another form of dementia.

Lacking an estate plan, all the assets you have worked to accumulate are subject to being distributed by a court-ordered executor, who likely doesn’t know you or your family. Having an estate plan in place protects you and your family.

Living Will or Advanced Directive. A living will provides directions from a patient to their doctor, concerning their wishes regarding life support. This alleviates the family from having to make a painful and permanent decision. They will know what their loved one wanted.

Springing Durable Power of Attorney. This document will allow someone you choose to make financial and legal decisions on your behalf if you are not able to. Some attorneys prefer to use the Durable Power of Attorney, rather than the Springing POA, since the Springing event may need a physician to state that the individual has become incapacitated, and it may require the court becoming involved. Powers of attorney can be drafted to be very limited in nature (i.e., to let one single task be accomplished), or very broad, allowing the POA to handle everything on your behalf.

Durable Power of Attorney for Health Care. This lets a person you name make health care decisions for you, if you are not able to do so. The decision-making power is limited to health care only.

Should Your Health Care POA and Your Financial/Legal POA be the Same Person? Deciding who to give these powers to can be difficult. Is the person you are considering equally skilled with health care as they are with finances? Someone who is very emotional may not be able to make health care decisions although they may be good with money. Think carefully about your decision. Just remember it’s better that you make this decision rather than leaving it for the court to decide.

Last Will and Testament: This is the document people think of when they think about estate planning. It is a document that allows the person to transfer specific property after they die in the way they want. It also allows the person to name a guardian for any minor children and an executor who will be in charge of administering the estate. It is far better that you name a guardian and an executor than having the court select someone to take on these roles.

The estate planning process will be smoother if you spend some time speaking with your spouse and family members to discuss some of the key decisions discussed above. Talk with your loved ones about your thoughts on death and what you’d like to have happen. Think about what kind of legacy you want to leave and then contact an experienced estate planning attorney to put your plan into action.

Estate battles often leave families estranged during a time when they need each other most. Spend the time and resources creating an estate plan with a qualified estate planning attorney. Leaving your family intact and loving may be the best legacy of all.

Reference: The Mercury (Oct. 27, 2019) “Estate planning basics and an estate attorney meeting preparation”

 

It’s Like Going to the Dentist: You Need to Get Your Estate Plan Ready

This is one of those things that you know you should do but you keep finding reasons not to. After all, says the article Estate planning: How to quit stalling and write your willfrom The Orange County Register, none of us likes to think about dying or what might occur that would require someone else to raise our children.

What do you need to get motivated and stop procrastinating?

Remember who you are creating a will for. Think of it as a love letter to those you leave behind. You want to provide specific instructions for the people you love about what you want to happen to your minor children, beloved pets and possessions. You are saving them the worries of trying to guess what you would have wanted and the cost of having to pay attorneys to clean up a mess after you have died.

Legal visualization. Think about what will happen in the absence of a will. Without an estate plan, a court will decide who will raise your children. State law determines who inherits your possessions and maybe the laws won’t follow your wishes. Every estate planning attorney has stories of people who die without planning. A spendthrift heir can easily spend a lifetime’s work in less than two years. A trust can be used to control how and when money is distributed.

Simple works. Don’t let the term “estate plan” throw you. A basic estate plan is not as complicated or as expensive as you might think. An experienced estate planning attorney will guide you through the process. You should also think about the short-term: what do you want to happen, if you die sometime in the next five years? You can always update the plan, if things change.

Give yourself a realistic timeline. Setting specific dates for tasks to be done and breaking the project out into smaller parts, can make this easier to address. Start by getting an appointment with an attorney on your calendar. Then set a date to have a conversation with your family members about guardians, charities and other intentions for your legacy. That might take place around Thanksgiving, when families have extended time together. By December 1, clarify and confirm that you want your documents drafted by an experienced estate planning attorney and set hte ball in motion to get the documents prepared and signed. You should also make sure to retitle any assets that are being moved into trusts.

If you were to start today, you could be done by New Year’s Day, 2020. Wouldn’t that feel great?

Reference: The Orange County Register (October 1, 2019) Estate planning: How to quit stalling and write your will

 

Why We All Need to Have an Estate Plan

Putting off estate planning is never a good idea. Life happens, and before you know it, “someday” arrives. Having an estate plan is advisable for everyone, says the South Florida Reporter in the article “Why Estate Planning is so Important.” It doesn’t matter if you are rich or poor—you need an estate plan. People with families who depend upon them, as well as singles who don’t, need an estate plan.

What exactly does estate planning mean? Estate planning is planning for the disposition of your assets, when you have died. It’s also done to protect you and your family, in the event you become incapacitated and cannot convey your wishes to others. It protects your family from complications, unnecessary costs and delays about distributing your estate.

Having an estate plan means that you have taken the time to plan out what you want to happen to your property and how you want to take care of your family when you are gone. For those who have young children, your last will and testament is the document used to name the person who will raise your children. It also lets you appoint a separate person (although it can be the same person) who will look after your finances, with regard to your children.

Without a will, a court will decide what should happen to your children and your property. The court must follow the laws of your state, which may not be what you had in mind. Let’s say you have a brother who lives far away and from whom you are estranged. If you don’t have a will and he is your legal next-of-kin, in some states he will inherit everything you own. It’s far better to have a will.

Estate planning also includes tax planning. Having an estate plan that is created by an experienced estate planning attorney with knowledge of tax planning will allow you to minimize your tax liability and make sure more of your assets are passed to the next generation, than are passed to the government.

Having an estate plans gives you the opportunity to take a long look at your life and your legacy. How do you want to be remembered? Do you want to leave behind part of your estate to a charity, a school or a healthcare facility that has been important to you or another family member? Planning for charitable giving is also part of an estate plan. Some people give because they are seeking tax benefits, but many are generous because they are creating a legacy.

Your estate plan can include a letter to your heirs explaining why you have made the decisions you have about your possessions and assets. This kind of letter is not a legally enforceable document. However, if there is a dispute about your will, it can be used to support your intentions.

Note that even the best estate plan needs to be updated every few years. Tax laws have changed with the new federal tax laws that were adopted in 2017. If your estate plan has not been reviewed by your estate planning attorney since 2017, it’s time for a review.

Reference: South Florida Reporter (June 12, 2019) “Why Estate Planning is so Important.”