Although most people understand the overall goals of an estate plan and may have a vague idea of what needs to be included in a plan, the specific components of an estate plan remain a mystery. Not surprisingly, this leads to questions. What does each of the estate planning tools accomplish? Which tools and strategies should be included in a plan? In the hope of making estate planning a little less intimidating, a Loveland estate planning attorney at Zimmer Law Office explains some common components that should be in the average estate plan.
Protecting and Distributing Assets
This will likely be your first, and most important, estate planning goal. The need to protect assets and the desire to decide what happens to those assets after death is typically what prompts people to create an initial estate plan. A simple Last Will and Testament will ensure that your assets are distributed according to your wishes when you are gone; however, you may prefer to use a trust to accomplish that goal for several reasons. Unlike assets distributed using a Will, trust assets bypass the probate process, meaning they are available to your intended beneficiaries much sooner. Trusts are also frequently used to protect assets from potential threats such as divorce, creditors, and even spendthrift beneficiaries. Finally, if you have minor children, a trust is essential because they cannot inherit directly from your estate.
When you think about the possibility of becoming incapacitated you probably envision someone who is older and suffering from Alzheimer’s disease or other age-related conditions. Though the likelihood of becoming incapacitated does increase during your retirement years, incapacity can strike at any age. Imagine being incapacitated because of a tragic accident tomorrow. Who would make medical decisions for you? Who would take over control of your assets and pay your bills? Who would make personal decisions for you if you cannot make them yourself? Absent an incapacity plan, the answer to these questions is that a judge would have to decide who to appoint to make decisions for you and take over control of your assets.
Planning for the Cost of Long-Term Care
You may be too young to be thinking about long-term care at this point in your life; however, the older you get the more likely it is that you will eventually need LTC. The cost of that care can be staggering, and it will not be covered by basic health insurance nor by Medicare. Medicaid can help if you qualify for benefits. Unless you anticipate the need to qualify for Medicaid in your estate plan, however, you could end up losing your retirement nest egg in the process of trying to qualify for those benefits.
You may already have a basic retirement plan started. If so, that is great; however, it needs to be incorporated into your estate plan to ensure that the two plans work in harmony with one another. Failing to consider both plans together could result in the loss of significant assets and the payment of unnecessary taxes when you reach your retirement years.
End of Life and Funeral Planning
It may not sound like something you want to spend time considering but including funeral and burial as well as end-of-life care into your comprehensive estate plan accomplishes several important goals. Executing an advanced directive ensures that your wishes about end-of-life medical care will be honored. Planning your own burial and funeral also ensures that your preferences and wishes will be honored when the time comes. Finally, it takes the emotional and financial stress off loved ones who will be grieving your loss and not in a position to make good decisions at the time.
Contact a Loveland Estate Planning Attorney
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about estate planning, or if you are ready to get started with your estate plan, contact an experienced Loveland estate planning attorney at Zimmer Law Office by calling 513-721-1513 to schedule your appointment today.