Helping our Clients begin the process of crafting an Estate Plan is just a starting point. There are a myriad of questions that need to be answered and concerns that need to be addressed before the Plan can begin to take shape. This burden can be overwhelming for many Clients if left to their own devices. Thus, you need a guide and a guiding hand to lead you through the complexity of all the issues and contingencies that apply to your unique situation.
Consider Key Elements.
Before meeting you need to identify the key elements of your Plan For example:
Who should inherit assets and should the assets be divided?
Who should care for your children if you cannot, including how to provide for your children’s education?
Who should handle your finances if you become incapacitated?
Who should administer your Estate Plan and distribute your assets?
Who should be the Executor of your Will? This person will ultimately be affirmed by the court and act as a fiduciary representing your best interests and those of your beneficiaries.
Make a list of current assets and liabilities. This will enable us to calculate your net worth and determine whether the Estate is subject to taxes. The list should include homes and any other property, such as vehicles, jewelry, artwork and any other objects of value. Other elements of the inventory include financial statements from bank, brokerage and retirement accounts; safety deposit boxes or safes; insurance policies and liabilities, such as mortgages, lines of credit and all other debts, as well as, any and all information related to a family business.
Determine the Beneficiaries.
In most states, you can disinherit anyone except your spouse (unless your spouse waived that right in a marital agreement). You should also designate secondary beneficiaries in the event an heir dies or a designated charitable organization no longer exists after you pass away.
Should a Client Establish a Trust?
Beneficiaries can receive assets directly or through a Trust. The decision to create a Trust will likely depend on multiple factors, such as a benefactor’s age, health and the family’s financial circumstances. There are multiple types of Trusts, but a common choice is a Revocable Living Trust that manages and distributes assets and avoids probate after a Client dies. If you establish a Trust, you will need to determine how long the Trust will exist, when the beneficiaries will receive the assets, and what happens if the beneficiary dies before the assets are distributed.
Creating the Estate Plan:
In many instances, a Client may want and need to work with more than one professional expert on an Estate Plan. If that is the case, your Estate Planning Attorney can "quarterback" the team and insure that all the contingencies are covered and the documents reflect your wishes.
Some of the more common members of an Estate Planning Team and their Duties include:
A. Estate Planning Team.
Attorneys can craft or update Wills and Trusts as needed and make sure the Plan meets all federal and state requirements.
Tax advisors help minimize taxes owed by beneficiaries on the assets they inherit.
Financial advisors ensure assets are managed specific to the client’s needs, goals and risk tolerance.
Insurance Agents can assist on those elements of the Plan that involve life insurance.
B. Preparation/Documentation. Essential documents and information the team will need or should create for an Estate Plan may include:
A Will should be created or the most recent Will should be reviewed;
Trusts, either a client’s own or those in which a client, spouse or other heirs are beneficiaries;
Financial Powers of Attorney;
Prenuptial or Marital Agreements, if applicable;
Business ownership documents and information, if applicable;
Advance directives, such as Health Care Powers of Attorney or Living Wills.
Typically, these documents are drafted at the same time to ensure a couple’s wishes regarding life-sustaining treatment are carried out if they become terminally ill.
C. Review and Update. Once an Estate Plan is in place, you should plan to review and update every three (3) to five (5) years or whenever you experience a life-changing event, such as:
The death of a spouse;
The birth or death of a beneficiary or fiduciary;
Moving to another state or country;
A significant change in your client’s financial situation;
The purchase or sale of a business;
Divorce or remarriage; or
The client, spouse or a beneficiary becomes physically or mentally disabled.
The value of an Estate Plan goes beyond the time and money it can save your loved ones once you are gone. Having an Estate Plan in place gives loved ones the assurance they are financially secure to the best of your abilities and can serve as a valuable relationship between the Estate Planning Attorney and your family's subsequent generations.
Estate Plan Documents Summary.
Most people are unaware of what documents make up an Estate Plan.
In essence, several documents are normally required to handle all issues that may arise due to incapacity or death. A good Estate Plan will likely consist of the following documents:
A Will to nominate guardians for your children and lay out your wishes about how your property should be distributed upon your death.
A Living Trust to lay out your wishes regarding how property should be managed and distributed upon your death or incapacity. Note: Property in a trust passes outside of the court and avoids probate, which is particularly important since the probate process may become time-consuming and expensive.
A Power of Attorney for financial matters to appoint individuals to make financial decisions on your behalf either now or triggered by your incapacity.
A Health-care Directive (Living Will) to appoint the individual(s) to make medical decisions on your behalf and to specify the type of care you want to receive, such as pain relief administered if you are terminally ill or permanently unconscious, and your preferences regarding organ donations and other final arrangements.
Most Estate Plans begin with a Will and/or a Living Trust.
Wills and the Probate Process. A Will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your Will must go through your state’s probate process before they can be distributed to your heirs. (If you own property in other states, your family will probably face multiple probates, each one according to the laws in that state.)
The process varies greatly from state to state, but it can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. With rare exception, probate files are open to the public and excluded heirs are encouraged to come forward and seek a share of your estate. In short, the court system, not your family, controls the probate process.
Living Trust and the Probate Process. Jointly-owned property and assets that let you name a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, etc.) are NOT controlled by your Will and usually will transfer to the new owner or beneficiary without probate.
But there are many problems with joint ownership, and avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably insist on a guardianship until the child legally becomes an adult.
For these reasons, and others, a Revocable Living Trust is preferred by many families and professionals. It can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your values to your family and future generations.
Unlike a Will, a Trust does not end with your death. Assets can stay in your Trust, managed by the trustee you selected, until your beneficiaries reach the age you determine they will inherit the assets in the Trust. Your Trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending.
A Living Trust is more expensive initially than a Will, but considering it can avoid court interference at incapacity and death, and is private, many people consider it to be a bargain.
Finally, most people do not give much thought to the wording they put on titles and beneficiary designations on life insurance policies or pensions or even bank records. You may have good intentions, but an innocent error can create problems for your family at your disability and/or death. Beneficiary designations are often out-of-date or otherwise invalid. Naming the wrong beneficiary on your tax-deferred plan, for example, can lead to devastating tax consequences. It is much better for you to take the time to do this correctly now than for your family to pay an attorney to try to fix things later.
Wealth Management. Wealth Planning and Wealth Management are core elements of your (and your family's) quality of life. It's an ongoing process not a one-time event. Life circumstances such as having a child, marriage, divorce, disability, and impending death affect your financial picture.
Whether your needs are straightforward or more complex, our process begins with a personalized review of your financial and life objectives. We work together with you and your CPA, financial advisor, and insurance professional to: Identify and understand your key goals, objectives, and the wealth management issues most important to you develop your net worth statement and assess your current financial situation draft your estate and wealth management legal documents plan for life changing events through several types of estate planning techniques discuss considerations for retaining, transferring, or sharing your wealth.
Cost of an Estate Planning.
For more information, review our VEPS Page, or please click here to REGISTER and complete the simple QUESTIONNAIRE – and review the various ways that we can assist you and your family with your Estate Planning.
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The best time to plan your estate is now.
None of us really likes to think about our own mortality or the possibility of being unable to make decisions for ourselves. This is exactly why so many families are caught off-guard and unprepared when incapacity or death does strike. Don’t wait. You can put something in place now and change it later…which is exactly the way estate planning should be done.
You can also review our Concierge Estate Planning Service under Legal Plans.
The best benefit is peace of mind.
Knowing you have a properly prepared plan in place - one that contains your instructions and will protect your family - will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.
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