Thinking about death and disability can be daunting. That is why one of the most crucial steps you can take to protect yourself and your loved ones is proper estate planning. A tailored estate plan will give you peace of mind while helping your loved ones avoid the costly and time-consuming probate court process. It will also help avoid the frustration involved in managing the affairs of those who become incapacitated or pass away. Take control of your affairs and your future today.
If you become incapacitated, you will not be able to manage your own financial affairs. Many people are under the mistaken impression that a spouse or adult children can automatically take over if they become incapacitated. The truth is that in order for others to manage your finances, they must petition a court to declare you legally incompetent (unless you had a durable power of attorney for finances in place beforehand).
This court process can be lengthy, costly, and stressful. Even if the court appoints the person you would have chosen, that individual may have to return to the court every year and show how every penny is spent and invested. The court will also require the individual to file documents updating the court about the incapacitated person’s status, living arrangements, and health.
Suppose you want your family members or a particular person to be able to take over for you immediately. In that case, you must work with the right estate planning attorney to draft proper legal documents designating a trusted person, or persons, with the authority to access your bank accounts, pay bills, administer taxes, enter into agreements, and make financial decisions you would have made if not incapacitated. Many people mistakenly believe that a simple will can protect them in the event of incapacity, but the truth is that a will does not take effect until you pass away.
In addition to planning for the financial aspect of incapacity, it is critical to establish a plan for your medical care. The law allows you to appoint someone you trust. For example, a family member or close friend can make medical treatment decisions on your behalf if you lose the ability to decide for yourself. You can do this by creating a durable power of attorney for health care.
The overwhelming thought about probate court is this: if you can avoid it, you should. If you do not have estate planning documents, your assets will be divided according to the laws of the state where you live. This means that state law will dictate who receives your assets and how much they receive, all through the probate court process.
If you leave your estate assets to loved ones through a will, you will not avoid probate, and everything you own will pass through probate court. The process can be expensive, time-consuming, and public. The probate court controls the estate until it has been settled and distributed. During this time, it is not unusual for probate courts to freeze assets for weeks or even months while determining the proper disposition of the estate, making it difficult for your family to pay for living expenses.
If you are married and have children, you want to ensure that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled. With proper planning, your assets can pass to your loved ones quickly, privately, and inexpensively. One of the most effective ways to avoid probate court is through the use of a revocable living trust.
It is important that your estate plan address issues regarding the care and financial support of your children. If your children are young, consider implementing a plan that allows your surviving spouse to devote more attention to them without the burden of work obligations. You should also ensure that your spouse has sufficient resources to care for your minor children.
Discussions with your attorney should include nominating a guardian for your minor children in the event that both you and your spouse pass away. You should also choose a trustee or personal representative to carry out your estate planning objectives, ensuring that your assets are disposed of properly and according to your wishes.
For adult beneficiaries, you should consider how assets will be distributed:
Most clients prefer the lifetime trust method because it provides additional creditor protection.
This is where proper estate planning becomes vital. Several techniques and strategies can help avoid or minimize estate taxes. Find out whether your estate could be subject to estate taxes, and ask your attorney what you can do to eliminate or reduce them.
Do you want to leave assets to a particular charity or organization? A proper estate plan can help you accomplish that.
A well-thought-out estate plan should provide for your loved ones effectively and efficiently by avoiding guardianship during your lifetime, probate court upon your passing, unnecessary estate taxes, and delays. You should consult a qualified estate planning attorney to review your family and financial situation, discuss your goals, and explain the options available to you. Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family.
