What is Estate Planning?
The Mirriam Webster dictionary definition of estate planning is, “ the arranging for the disposition and management of one’s estate at death through the use of wills, trusts, insurance policies, and other devices.”
In common terms, estate planning is the process of using legal means to make sure that upon your death your belongings are transferred to the people you choose to receive them. It can also grant your chosen representative legal powers to properly handle any tasks that arise after your death, but which are in your name.
Depending on the size of your estate, this planning could be accomplished simply through a carefully constructed Last Will and Testament. However, many law firms offer free consultations which can help you determine if additional planning is advisable for your individual circumstances. Akin Developers works with a vast network of professionals and can help you identify trusted attorneys and Lawfirms who offer these services.
Russell’s Introduction to Estate Planning
Russell Burton is a 43-year-old father of four who first learned about estate planning in a seminar his company set up for all their employees. The seminar was planned as a way to better educate the employees about their benefits and ways they could protect themselves and their families.
After listening to the presentation, Russell ece concerned because estate planning wasn’t something he was familiar with and he wanted to be certain he was leaving things in good shape for his family should anything happen to him. The following are some of his specific concerns and what he learned about them.
How Do I Know If I Need An Estate Plan?
Again, consultation with legal professionals is the best way to determine if an estate plan is in your best interest and what you want for your family upon your death. If your estate is large enough that the value of the estate exceeds the estate tax exclusion, not having a well-planned and executed estate plan can greatly decrease the final value of the estate your family inherits upon your death.
However, there are other considerations to be made as well. Primarily, the Mirriam Webster definition leaves out a very important fact about estate planning – it is not just about what happens upon your death. A critical part of estate planning is preparing for your incapacitation as well.
For instance, if you were to suffer an illness or injury that left you unable to properly manage your affairs and oversee your assets, having a properly prepared estate plan in place would make it much simpler for your spouse and/or family to take over management of your assets and affairs – paying bills, handling insurance issues, making medical decisions, handling retirements accounts, etc.
What Does an Estate Plan Do?
In addition to the preparation of a legal last Will and Testament, proper estate planning usually includes proper preparation of a durable financial power of attorney, durable medical power of attorney, Living Will, HIPPA authorization, and other legal documents as advised by a professional after careful consultation. These documents each serve a specific legal purpose, with the combined goal of assuring that your wishes are met in the case of your incapacitation or death.
Should you become incapacitated, the durable powers of attorney (financial and medical), along with the HIPPA authorization grant your spouse or another caregiver of your choosing, the authority to make medical and financial decisions on your behalf. In the event of your death, your chosen and assigned caregiver will have the authority to assume responsibility for all matters related to your estate.
As part of your estate planning, special preparations can be made for the assignment of specific assets to specific individuals, charitable gifts, and any other specific wishes you have for how your assets are assigned and distributed in the event of your death.
A properly constructed estate plan can also minimize aspects of the probate process that can make the experience even more difficult for your loved ones. The probate process can be lengthy and expensive. Probate proceedings are also public information, meaning any and all information is generally available to anyone who requests it. A legal and properly executed estate plan can minimize what specific information is available to the public – thus protecting the privacy of your life and your family. An estate plan can also minimize delays in the process and the cost of the probate process for your loved one.
An estate plan should also include arrangements for any special circumstances that may exist in your family. Some of these circumstances may include planning for the care of minor children or children (minor or adult) with special needs. Specific and specialized trusts can be established to provide for these needs. An estate attorney can help you to determine exactly what provisions should be included and the best way to set up those trusts. If not done properly, this could cost your estate thousands of dollars in tax implications.
As Russell learned, a well-planned and executed Estate Plan can make the very difficult situation of your incapacitation or death much less overwhelming for your loved ones. It can also protect the value of your estate and even prevent delays and lessen the expense of the probate process. But it is important to seek the advice of a professional to ensure that all situations specific to you and your family are planned for. Akin Developers can direct you to trusted professionals who can help you navigate the process of estate planning and better protect your estate for your loved ones.