Estate Planning

What Is Estate Planning?
Estate planning is the process of setting forth how, when, and to whom your assets will be distributed at the time of your death. Estate Planning is also the process of determining how your assets and health care will be managed during your lifetime if you are unable to manage your own assets or healthcare yourself.

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Who Needs Estate Planning?
Everyone. Regardless of your situation, you should make arrangements regarding the persons who will handle your financial and medical affairs during your life if you are ever unable to do so for yourself, the persons who will oversee the distribution of your assets upon your death, the persons who will act as guardians of any minor children, and how and to whom you want your assets distributed upon your death. If such actions are not taken, the local probate court and state statutes will make these decisions for you.

 

What Is Probate?
Probate is a court-supervised process of properly paying claims, expenses and taxes of your estate and transferring or distributing the probate assets, owned by you at the time of your death, to those entitled to receive the assets under your Will or pursuant to state statute if you do not have a Will. Probate assets include, but are not limited to, property that you own in your name alone, property that you own jointly with others as tenants in common, and your life insurance, annuities, and retirements accounts for which you have not designated a beneficiary. Non-probate assets include, but are not limited to, property held jointly with others as joint tenants with rights of survivorship, assets payable to a named beneficiary, and assets promised to others by written agreements, such as through a partnership agreement, shareholder's agreement, or operating agreement. Although probate offers the advantages of judicial oversight, some disadvantages of the probate process are that your Will and the value of your assets become public records, attorney's fees and executor's commissions may be expensive (leaving a smaller amount to your beneficiaries), and the probate process may take months or years to resolve. Preparing an estate plan prior to your death may allow you to avoid probate and, by doing so, keep your estate private, reduce attorney's fees and executor's commissions, and streamline the distribution of your assets to your beneficiaries.

 

What Documents Make Up An Estate Plan?

The Last Will and Testament communicates your wishes as to how you want your assets to be distributed upon your death. It allows you to make specific bequests of any type of property to specific individuals and allows you to appoint your Executor (the person who will oversee the distribution of your probate assets) and nominate guardians for your minor children.

The Living Trust is a mechanism for owning assets for the benefit of yourself and third persons, either currently or in the future. A Living Trust is created during your lifetime, but may be funded at your death. If funded during your life, assets owned by trust are fully accessible by the creator of the trust. Benefits of a Living Trust include:

• The assets held in the Living Trust at the time of your death avoid probate.
• A Living Trust is completely private. Unlike a Will, it is not filed with the probate court.
• Allows the Living Trust creator to determine how and when beneficiaries receive assets.
• The Living Trust protects assets from non-beneficiaries and creditors of beneficiaries.
• The Living Trust can help minimize estate tax for couples with a combined gross estate (value of all assets of whatever kind and nature owned at the time of death, including life insurance) in excess of $3.5 million.

The Durable Power of Attorney allows for the appointment of an agent who has access to your financial affairs and handles all financial matters if you are unable to do so for yourself. Minimizes potential of having to create a probate court supervised guardianship on your behalf.

The Health Care Power of Attorney allows for the appointment of an agent to make health care decisions on your behalf in the event you are in an incapacitated state and unable to do so for yourself. It minimizes the potential of having to create a formal probate court supervised guardianship if you become incapacitated.

The Living Will is a directive to medical doctors on whether you want or do not want the dying process to be artificially prolonged by the application of life sustaining treatment or artificial nutrition and hydration in the event you are determined to be in a terminal condition or a permanently unconscious state.