Estate Planning
Most of us might not think we have what could be termed an estate, but an estate is simply a collection of the assets we’ve accumulated over a lifetime and planning for end-of-life involves forming an estate plan. Your estate plan will help you make your wishes known regarding who is to receive your assets, administer your estate, and serve as guardian of your children upon your death. It will also communicate your wishes related to life-sustaining treatment decisions and allow you to address other issues while you are living regarding financial and healthcare matters. That sounds like a lot, but it’s possible to simplify your estate-related paperwork with this checklist:
1. Last Will and Testament
A Last Will and Testament takes care of any property that must be probated and designates who is to receive your estate.
Probate refers to the process of authenticating a Last Will and Testament in court. If there isn’t a will, then state law will determine how your estate will be distributed and who may be appointed by the court to administer the estate. Once appointed by the court, the personal representative or executor/executrix becomes the legal representative of the estate.
After the court appointment, the personal representative is required to give notice to all known creditors of the estate. This is followed by an inventory of the estate property, including real property, stocks, bonds, business interests, and other assets. The personal representative determines which creditor’s claims are legitimate.
Once you’ve hired an experienced estate planning lawyer, you can determine if a Last Will and Testament is enough or if you need to take that extra step of Living Trust planning. Living Trusts can distribute assets similar to a will, can help avoid probate, address estate tax issues, and are helpful in certain family circumstances.
2. Powers of Attorney
Part of estate planning is creating a plan for what happens in the event you become incapacitated or are no longer able to handle your affairs while you are living. Powers of Attorney can designate someone to manage your assets, make legal decisions on your behalf, and work with doctors to make medical decisions while you are living without the necessity of a guardianship. You can direct that the person can act on your behalf immediately or only if you are no longer able to make decisions.
3. Advance Directive (Living Will)
An Advance Directive, also known as a Living Will, is a document that allows you to make your wishes known regarding life-sustaining treatment like CPR or ventilator use, artificially administered food and water, and other end-of-life decisions in the event that you are unable to make or communicate those decisions yourself. Like a will, you should ensure that your instructions are readily available to responsible parties should the need to reference them arise.
4. Beneficiary Designations
Certain asset transfers are controlled by contract. For example, proceeds from life insurance, annuity contracts, IRA accounts, and pensions will pass to whomever you have designated as your beneficiary on the forms associated with those contracts. Contract assets will normally pass without regard to the content of your will and without the often-cumbersome probate process. It is important to coordinate the beneficiary designations in contracts with the provisions of your will to ensure they work in concert with one another.
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Should you need any of these terms clarified, it’s best to speak with an estate planning attorney. If you’ve already created a good foundational estate plan, then your next step is to consider whether you need advanced estate planning. A good estate planning attorney can integrate advanced planning with the plan you already have in place.
Circumstances in your life also may have changed. If you’ve gotten married or divorced, had or adopted children, bought or sold a business, retired, moved across the state or cross-country, or lost your spouse, consider consulting a legal professional because any of these life events can have a direct impact on your estate plan. Estate and gift tax laws change over time and will impact your initial estate plan as well. Review and update your estate plan with a qualified professional estate attorney. Learn how a LegalShield membership can help you create your estate plan.
This is not intended to be legal advice. Please contact a professional for further information.
