Far too many people procrastinate when it comes to estate planning because they don’t know where to begin. If you take action and arrange for a consultation with our firm, we can answer all of your questions and help you put a custom crafted estate plan in place.
In this post, we will look at hypothetical conversation between an estate planning attorney and a client. When you digest this information, you will have a better understanding of the estate planning process.
When you plan your estate, you create a last will, right?
It is true that the document known as a last will is commonly utilized as an asset transfer vehicle. However, there are other options available to you. It is wise to learn about the other possibilities that may be more advantageous.
Why would a will be a bad choice?
If you were to use a last will to state your final wishes, you would name an executor in the document to handle the estate administration tasks. The executor would be required to admit the will to probate after you pass away, and the court would provide supervision.
The inheritors that are named in the last will cannot receive their bequests while the estate is being probated. This will definitely take at least eight months to a year if the situation is not complicated in any way, and complex cases can take considerably longer.
There are also a number of expenses that accumulate during probate, and this is another negative. Plus, the inheritors receive all receive lump sums when a last will is utilized. This can be a source of concern if you have someone in the family that is not good at handling money.
These are some of the reasons why a last will can be the wrong choice, but there are others.
What legal document would be a good alternative to a last will?
The answer to this question would depend upon the circumstances, but one device that is ideal for a wide variety of people is the revocable living trust. Some laypeople are under the impression that you surrender control of assets that you convey into any type of trust, but this is not the case with living trusts.
If you ever choose to do so, you can revoke the trust entirely and take back direct possession of the property. While you are alive, you can act as the trustee and the beneficiary, so you have absolute control on every level.
In the trust declaration, you name a trustee to succeed you, and your heirs would be the beneficiaries. After you are gone, the trustee would follow your instructions and distribute assets to the beneficiaries, and the probate process would not be a factor.
Getting back to the matter of lump sum inheritances, if you have a living trust, you could instruct the trustee to distribute assets to the beneficiaries, or a particular beneficiary, incrementally over time.
Are there any other matters to address outside of monetary asset transfers?
This is a very good question, and the answer is yes, there are some additional things to think about. This is not a very pleasant subject to consider, but many people become unable to communicate sound decisions toward the end of their lives. To account for this, you can include an incapacity component when you are planning your estate.
In some instances, medical professionals can use artificial means to keep patients alive indefinitely, even if they are not responsive. Would you want be kept alive in this manner? You can state your preferences one way or another in a legally binding manner through the execution of a living will.
A living will is an advance directive for health care, and there is another advance directive that should be part of your incapacity plan. You can add a durable power of attorney to name someone to make medical decisions on your behalf that are not related to life support.
You need to empower a financial representative as well, and this can be done through the creation of a durable financial power of attorney. We should point out the fact that you could empower a disability trustee to administer your living trust if you use this device as the centerpiece of your estate plan.
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