ESTATE PLANNING LAWYERS

Wills and trusts are essential and commonly used in the estate planning process. However, they are not the same. A will affects the distribution of assets after your passing along with other decisions, including guardianship of minors. Additionally, a will can instruct the executor to create a trust. This typically occurs so assets are held until the benefactor reaches a specific age. Once finalized and signed, it is filed with your jurisdiction’s probate court.

A trust also affects the distribution of your assets but can be used while you are alive. A trustee manages the trust administration. They are fiduciary required to follow the terms outlined in the trust and make financial decisions in the beneficiary’s or beneficiaries’ best interest. You can create a living trust, executed during your lifetime, or a testamentary trust, created post humorously. Additionally, there are charitable and special needs trusts.

The role of a guardian is the day-to-day caring for a minor child, elderly or vulnerable parents/adults, or adult with a disability/disabilities. They decide on living situations, nursing home placement, and healthcare decisions. Guardianship decisions occur if you become incapacitated and can no longer fully care for them.

The conservator manages the finances for the minor child until they come of age, the elderly or vulnerable parents/adults, or an adult with a disability/disabilities. They pay day-to-day or medical bills, manage financial accounts, pay debts, and handle government benefits.

The same person can be a guardian and conservator. However, often they are two different people.

If you become incapacitated or lose your mental functions, your power of attorney/durable power of attorney makes financial decisions on your behalf in either temporary or permanent situations. Mental incapacity includes conditions such as senility, Alzheimer’s, or schizophrenia. A power of attorney can have complete authority, or you can limit their decision-making abilities.

Your living will tell family members what type of medical care you want or do not want to receive if you become incapacitated and can not speak for yourself. This includes the use of feeding tubes, pain management, or procedures.

Advance directives and living wills are similar, but advance directives include more health care directives for the medical staff and your family. This includes do not resuscitate orders (DNR), organ donation, and/or medical power of attorney. Some states use the terms living will and advance directives interchangeably.

A medical power of attorney (POA) specifies who can make medical decisions on your behalf, including end-of-life. Your medical POA can handle non-end-of-life decisions, such as a complication during surgery. They can also handle your end-of-life decisions.

To prepare your estate plan effectively, your attorney will need a clear picture of your financial situation and wishes. Here are some documents that will be helpful:

Inventory of your assets: This is a comprehensive list of everything you own, including real estate (house, land, etc.) with titles or deeds; financial accounts (checking, savings, investment accounts) with statements; retirement plans (401(k), IRA, etc.) with account summaries; Life insurance policies with beneficiary information; tangible personal property (jewelry, artwork, collectibles) with estimated values (if significant); and any outstanding debts you owe (mortgages, loans, etc.) with account numbers.

Beneficiary designations: Review existing beneficiary designations on your retirement accounts and life insurance policies. These forms specify who receives the benefits upon your passing. Bring copies of any recent updates.

List of important contacts: This list should include your spouse/partner, children, any other intended beneficiaries, and your preferred choice for executor (the person responsible for carrying out your will). Include full names, addresses, phone numbers, and email addresses for everyone.

Existing estate planning documents: If you already have a will, trust, power of attorney, or healthcare directive, bring those along for review. Your attorney can assess if they are still relevant and need any adjustments.

Estate planning is often put off, but it's a crucial step for everyone, regardless of age or wealth. Here are some key life events that signal it's time to consider estate planning:

Once you reach adulthood: Even if you have limited assets, having a basic will can ensure your wishes are followed in the event of your unexpected passing. It can also designate who inherits your belongings and avoid potential conflicts.

Getting married or divorced: Marriage laws and divorce settlements can significantly impact how your assets are distributed. An estate plan ensures your wishes supersede any default legal outcomes.

Having children: This is a major life event that necessitates estate planning. A will allows you to designate guardians for your children if something happens to you and both parents. Additionally, you can establish trusts to manage assets for their future benefit.

Acquiring significant assets: As your financial situation evolves, and you acquire valuable property or investments, a more complex estate plan might be necessary. An attorney can guide you on strategies to minimize taxes and protect your assets.

Regardless if you have a will or not, your estate will go into probate. Probate is the general administration of your will. The executor will complete the probate process by filing the will with the probate court, collecting the assets, paying any debt or liabilities, and distributing the assets per the will’s directives.

If there is no will, the estate becomes an intestate estate, and the assets will be distributed according to state laws.

An estate planning attorney or probate attorney helps individuals who need assistance with probate or the administration of an estate. They also help individuals who wish to assist estate administrators, executors, or beneficiaries who want to transfer or sell estate properties.

The estate executor manages your estate administration. They will distribute your assets per your will. After they have paid administrative expenses and settled all debts, any leftover assets will be distributed with your state’s intestacy laws. Your will can also have a revocable trust created for any leftover assets. Those assets will transfer over to the trustee or trustees.

If you have not created a will or trust, your property will enter the probate process as an intestate estate. There, the courts decide on the beneficiaries of your estate. The beneficiaries include your spouse, child(ren), parents, and siblings. Your state has a beneficiaries hierarchy if there are no surviving parents or siblings.

Unfortunately, your trust or estate may owe taxes or taxes may need to be filed after your passing. These include federal estate taxes, state estate taxes, state inheritance taxes, federal gift taxes, generation-skipping transfer taxes, and/or income taxes. Not all taxes apply in all states or to all trusts or estates.

An estate attorney can assist you through estate tax minimization strategies and other techniques, including estate and gift planning.

Life is full of changes, and your estate plan should reflect that. It's wise to review and update your plan whenever there's a major life event, such as:

Marriage, divorce, or birth of a child: These events can significantly impact your beneficiary designations and overall wishes for your estate.

Changes in beneficiary designations: If you have a change of heart regarding who inherits your assets or life insurance benefits, you'll need to update the relevant documents.

Significant changes in your assets or debts: A major purchase, inheritance, or debt reduction can alter your estate's value and distribution needs.

Moving to a new state: Estate laws can differ from state to state. Reviewing and potentially revising your plan with a local attorney ensures it complies with your new state's regulations.

Health concerns: If you experience a serious illness or injury, it's crucial to revisit your healthcare directive and ensure it accurately reflects your wishes for medical treatment.

By proactively updating your estate plan, you can ensure your wishes are followed even during unexpected circumstances.

The biggest consequence of not having an estate plan is the lack of control over how your assets are distributed after you pass away. In such cases, the state will decide how to distribute your assets according to their intestacy laws (laws governing distribution without a will). This may not align with your wishes and could lead to several problems:

Delays and legal fees: The probate process (court procedure to settle an estate) can be lengthy and expensive, especially in the absence of a clear will.

Family conflict: Without clear instructions, disagreements among family members regarding the distribution of assets can arise, leading to emotional distress and potential legal battles.

Inefficient distribution: The state's intestacy laws may not consider your specific family situation or preferences, leading to unintended outcomes for your loved ones.

By taking the time to create an estate plan, you can provide peace of mind for yourself and your loved ones, ensuring a smoother and less stressful transition during a difficult time.

Estate planning involves making thoughtful decisions about your assets and loved ones. Here are some key factors to consider:

Who will inherit your assets? This is a core question in estate planning. Determine who you want to receive your belongings and in what proportions. Consider factors like spouse, children, other relatives, charities, or even friends.

Who will manage your finances if you're incapacitated? A power of attorney allows you to designate a trusted individual to handle your financial affairs if you become unable to do so yourself due to illness or injury.

Who will make medical decisions for you if you can't? A healthcare directive, also known as a living will, allows you to specify your wishes for medical treatment in case you are incapacitated and cannot communicate your preferences.

Minimizing taxes and avoiding probate: Estate planning strategies can help reduce the tax burden on your estate and potentially avoid probate altogether. An attorney can advise on options like trusts and beneficiary designations to optimize your plan.

Ensuring your wishes are followed: A well-crafted estate plan ensures your loved ones are taken care of according to your desires. It minimizes confusion, conflict, and unnecessary delays during a difficult time.

By considering these factors and consulting with an estate planning attorney, you can create a plan that reflects your values and ensures your legacy is handled according to your wishes.