 Estate planning can be confusing and overwhelming, so much so that people procrastinate and put it off, resulting in no planning at all.
Sadly, many people don’t do proper estate planning because they don’t believe that they have “a lot of assets,” or otherwise believe that their kids can just come in and divide the assets by themselves. If you don’t make proper legal arrangements, for the management of your assets and affairs after your passing, then the state’s intestacy laws may take over upon your death or incapacity. This may result in the wrong people getting your assets,
Specifically, if you die with a will and have assets titled in your name only (over statutory amounts) or if you die intestate (without having a will), then the transfer of your assets is accomplished through a public, court-supervised proceeding called probate that generally take a year or more. These public proceedings are generally expensive and time-consuming in nature and tie up your assets for several months, and potentially years. Even worse, your failure to outline your intentions through proper estate planning can tear apart your family as each person maneuvers to be appointed with the authority to manage your affairs. Nor is it unusual for bitter family feuds to ensue over modest sums of money or a family heirloom.
Planning your estate today is essential to making sure your loved ones are protected in the event of sudden, unexpected death or incapacity.
What estate planning documents should I have?
A comprehensive estate plan should include the following documents (at least for people that are owners of real property) prepared by an attorney based on in-depth counseling which takes into account your particular family and financial situation:
A Living Trust can be used to hold legal title to and provide a mechanism to manage your property. You (and your spouse) are the Trustee(s) and beneficiaries of your trust during your lifetime. You also designate successor Trustees to carry out your instructions as you have provided in case of death or incapacity. Unlike a Will, a Trust usually becomes effective immediately after incapacity or death. Your Living Trust is "revocable" which allows you to make changes and even to terminate it. One of the great benefits of a properly funded Living Trust is the fact that it will avoid or minimize the expense, delays and publicity associated with probate. Read the FAQ section on Living Trust for more information.
If you have a Living Trust-based estate plan, you also need a Pour-Over Will. A Pour-Over Will is used first to name a guardian for minor children. Second, it protects against intestacy in the event any assets have not been transferred into the trust at the death of the Trustmaker/Owner. It should also invalidate any previous Wills which you may have executed. Its function is to "pour" any assets left out of the trust into it so they are ultimately distributed according to the terms of your Trust.
For some people, such as those who do not own a home, or have under prescribed statutory limits of assets (titled in their name only) then a living trust may not be necessary and instead a plan centered around a Will is all that is necessary. A Will is commonly referred to as a "Last Will and Testament", and is primarily designed to transfer your assets according to your wishes. A Will also typically names someone you select to be your Executor, who is the person you designate to carry out your instructions. If you have minor children, you should also name a Guardian as well as alternate Guardians in case your first choice is unable or unwilling to serve. A Will only becomes effective upon your death, and after it is admitted by a probate court.
OTHER DOCUMENTS:
A “Durable Power of Attorney for Property” allows an agent to carry on your financial affairs in the event that you become disabled. Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. This guardianship process is time-consuming, expensive, emotionally draining and often costs thousands of dollars.
There are generally two types of durable powers of attorney: a "present" durable power of attorney in which the power is immediately transferred to your attorney in fact; and a "springing" or future durable power of attorney that only comes into effect upon your subsequent disability as determined by your doctor. When you appoint another individual to make financial decisions on your behalf, that individual is called an "attorney in fact". Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend. Appointing a power of attorney assures that your wishes are carried out exactly as you want them, allows you to decide who will make decisions for you, and is effective immediately upon subsequent disability.
The law allows you to appoint someone you trust - for example, a family member or close friend to decide about medical treatment options if you lose the ability to decide for yourself. You can do this by using a Advance Health Care Directive (also known as a Power of Attorney for Health Care. This document is where you designate the person or persons to make such decisions on your behalf. You can allow your health care agent to decide about all health care or only about certain treatments. You may also give your agent instructions that he or she has to follow. Your agent can then ensure that health care professionals follow your wishes. Hospitals, doctors and other health care providers must follow your agent's decisions as if they were your own.
A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. Almost all states have instituted living will laws to protect a patient's right to refuse medical treatment. Even if you receive medical care in a state without living will laws this document is useful to a court trying to decide what an unconscious patient would want. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.
Some medical providers have refused to release information, even to spouses and adult children authorized by durable medical powers of attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. In addition to the above documents, you should also sign a HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.
At the Law Office of Daryl L. Binkley, we form lifelong relationships with our clients. Most estate planning matters are performed on a flat fee basis so you don’t receive any surprise bills in the mail, and we have an open door policy when it comes to asking questions. We want you to understand your plan, and more importantly, feel comfortable with the planning you’re doing for your family.
We look forward to devising a plan tailored to your needs . |