Estate planning allows you to ensure that your property is managed and distributed how you choose when you become incapable, or die. Typical estate planning includes:
- Power of Attorney
- Life insurance
- Property transfers
- Living will
Your estate is all of your assets, owned alone or with others, such as:
- Real Estate, including and land, homes, and buildings including any attached fixtures or property, whether natural or manmade (like landscaping, growing crops, etc.)
- Tangible personal property, such as vehicles, furniture, tools, equipment, jewelry, art, and collectibles
- Cash, bank accounts, stocks, bonds, savings, funds, and business interests
- Beneficiary interests, such as trusts or life insurance policies
Proper estate planning will result in lower fees and, frequently, lower taxes. An Estate Planning Lawyer can explain your options in simple terms to manage your estate assets efficiently so that your heirs receive the greatest benefit with the least amount of fees and taxes against your assets.
A will controls the distribution of your property after death, according to your wishes, managed by a Personal Representative you have chosen. In most cases, a will must be probated. Typical probate fees include:
- Court costs
- Personal Representative fees
- Attorney’s fees
Parents of minor children usually include a clause in the Will recommending a guardian should both parents perish. Those with few assets may choose to only have a will prepared, since their small estate will incur little probate fees.
Trusts may take effect before (living) or after (testamentary) death. For those with significant assets, a living trust is often recommended. Once the trust is established, your property is transferred and you manage it as trustee. If you become incapacitated, your successor trustee will manage it on your behalf. At death, the property remains in the trust until distributed according to its provisions. A living trust allows you to avoid probate at every step, thereby saving time and money.
Power of Attorney
A durable power of attorney allows the person you have chosen (the attorney-in-fact) to manage your assets (including paying your bills) when you are incapacitated. A power of attorney may substitute for, or supplement, a living trust to ensure efficient management of your finances and assets.
Life insurance is frequently a component of an estate plan and may be linked with a living trust to ensure that the proceeds of the policy are distributed according to your wishes.
Property is frequently transferred during estate planning. Common transfers include:
- Adding a joint tenant* to real property and financial accounts
- Naming a paid-on-death beneficiary
- Transferring assets to a trust.
*Adding a joint tenant with right of survivorship to a residence, vehicle or bank account allows for the immediate transfer of that asset to the intended beneficiary at death and avoids probate.
A living will (or health care directive or health care power of attorney) allows you to control the medical care of your final illness by including detailed instructions about the care you wish to receive.
Probate, Wills & Trusts, Living Wills, Power of Attorney