When deciding whether to hire an estate planning attorney or not, it is important to know what they do precisely and what services they have to offer. These proceedings are undertaken as a means of legally and formally preparing for future life and after-life. This can include protection of assets, health, power of attorney and much, much more.
There is a formal process for carrying this legal documentation through the court system, which experienced estate planning attorneys will fully understand and can simplify into terms their clients can appreciate.
Estate Planning Attorneys Take Planning To The Next Level
An experienced lawyer knows and understands all that is required so that your assets are completely protected in the case of illness or even death. Hiring an estate planning attorney that has completed cases like yours before can also speed up the process and reduce the learning curve. Nobody wishes to spend months getting their information together should there be a serious accident in the future.
The complexity of most legal documentation is why ninety-five percent of individuals hire estate planning attorneys for their paperwork. Most do not wish to face the possibility of losing assets, including that of money and belongings, due to miscommunication or lack of knowledge of court procedures. Speak to several attorneys before hiring the one you and your family feels best suits your needs.
It’s important to note that these proceedings are also an ever-changing legal process. What was legal and protective one year ago may have changed due to federal or state regulations the year after. To fulfill all paperwork and legal notations required can take anywhere from a few short days or even weeks before everything is complete. Be patient and understand that good legal work does take time and proper filings.
Even With the Repeal of the Death Tax, You Need an Estate Plan!
With the repeal of the estate tax (and generation-skipping tax or “GST”), you may have put your estate plan on hold. This could be a serious mistake and put your family’s (and business’) financial future in jeopardy!
You’ll need an estate plan whether estate tax (and GST) applies to you not. Tax avoidance (or more accurately, minimizing the estate tax) is not the only reason to establish your estate plan.
Do Not Let the State Distribute Your Estate!
The primary focus of most estate plans is to determine how to distribute your assets. If don’t go for an estate plan, the state imposes its plan on you, and the state’s order statutes will decide how your properties are distributed. Take John Smith’s case for example. John was married with three grown children. The oldest child worked with John in the family business. The youngest child was estranged from John, and they had not talked in over ten years. John repeatedly told his family he wanted to leave the business to the oldest child and he did not want anything passed on to the youngest child.
However, John died without a will and never put an estate plan into place. The oldest child was forced to file a lawsuit in probate to determine the ownership of the family business.
The probate court applied the state statute, distributed 1/2 of John’s assets (including the family business) to his wife, and split the other 1/2 among all three children equally! The court’s decision caused a huge rift in the family. With ownership of the family business in the hands of feuding family members, the business failed and closed its doors soon after John’s death.
To avoid having the state decide who is entitled to your assets and how much they will receive you need to have an estate plan.
Rule From the Grave
Perhaps one of the most powerful tools estate planning can provide is the peace of mind that your hopes and goals for your children will be relevant after you are gone. By transferring your assets through a trust, rather than outright, you can provide substantial limitations on the distributions from the trust. Your lawyer can help craft provisions that link distributions from the trust to certain requirements or goals you wish to impose.
For example, a trust could prohibit or limit distributions to a beneficiary until they reach a certain age or obtain a college degree. On the other hand, the trust can also provide a beneficiary with the right to withdraw funds from to help them with their education, pay for a wedding a house or open a business.
With an estate plan, you can also provide substantial protections to your surviving spouse, your children and the other beneficiaries of your trust. In general, debts and judgments against a trust beneficiary may not be satisfied with trust assets and a beneficiary cannot be forced to demand a distribution.
The use of a trust is also effective in keeping the assets separate from a beneficiary’s spouse; this reduces the likelihood of your assets ending up in the hands of a divorcing spouse.
Do Not Delay Have Your Say!
If you have children that are underage, you need to establish who will care for them if you pass away. This may be especially important if your child’s other parent is remarried, absent, or otherwise ill-prepared to handle the responsibility of raising your children. Again, if you don’t name guardians for your children, the state could appoint someone for them, particularly if your child receives an inheritance.
A properly drafted estate plan will address who will be the guardian for your children. You can assign the responsibilities to one or more persons – i.e., one person can be responsible for the general welfare of your child, while another guardian can be solely responsible for their finances.
Plot Your Own Fate and Avoid Probate!
Probate – the administration and distribution of your estate through the probate courts – can be an expensive, time-consuming process. However, with the proper and professional planning, it can be easily avoided. Estate planning is especially important to avoid probate when you own real estate in more than one state.
You probably have taken certain steps that can help you avoid probates, such as placing your home and bank accounts in joint ownership or providing for rights of survivorship and completing beneficiary designations for your 401K/IRA and insurance policies. These steps help avoid probate, but only to a certain degree. These steps often do not allow for more complex distributions.
Also, these steps only provide for limited distribution/access on your death, but do not address or offer any instruction on how you wish to be treated and cared for if you become disabled, incapacitated, or temporarily unable to make decisions for yourself. Worse yet, these steps may not offer your loved ones the access to your funds, accounts and other assets to pay for your care if you become incapacitated.
To avoid probate, you need to need to ensure your property, 401Ks, bank accounts are titled properly, and your wishes are properly documented.