What is usually included in an estate plan?
Estate planning is the advanced planning of how your affairs are handled in the event you become incapacitated oazr die. While basic estate planning may involve giving away your personal property upon your death, thorough estate planning involves much more. Estate planning provides you an opportunity to:
- Name an agent as a power of attorney to make financial decisions in the event you become incapacitated.
- Name an agent as health care proxy to make medical decisions on your behalf, should you become incapacitated.
- Name a guardian for your minor children.
- Provide for family members after your death.
- Provide for family members with special needs to ensure that they will not lose government benefits they are entitled to.
- Minimize taxes, court costs, and legal fees.
What happens if I die without a will?
Dying without a will is referred to as dying intestate. Each state has a set of statutes that outlines how your property will pass if you die without a will. Generally, property is divided amongst your closest relatives – typically, your spouse, children, parents, or siblings. Also, if you die without a will, your state will appoint a personal representative to fill the role of executor. Usually, there is a priority list that a court will pick from, beginning with your spouse and followed by your adult children.
Is there a difference from a last will and a living will?
Although these documents may sound alike, they are drastically different. A last will is a document that includes a set of instructions of how you would like your property to pass after you die. You can also use your last will as a vehicle to execute other important decisions, like who you would like to be the guardian of your minor children or who you would like to manage your estate. A living will, on the other hand, is a document that includes a set of instructions of how to handle medical decisions if you become incapacitated. A living will allows you to appoint a medical power of attorney that will act on your behalf when making decisions based on the instructions you outline in your living will. Each document is very useful as part of your estate plan and comes in to play at different, but crucial times.
Is probate always required?
Determining if probate is necessary is based on how the decedent holds his or her property at the time of death. Typically, if property is held in a trust or if it passes by operation of law (i.e., joint tenancy or payable-on-death account) probate is not necessary because it will pass automatically. Probate is also not necessary when there is a life insurance policy payable to a beneficiary. However, probate is necessary where assets need to be re-distributed out of the decedent’s name. For example, probate is required when there is no will and the decedent owns a home by herself. If the decedent is only survived by her adult daughter and her home passes to her daughter under her state’s intestacy laws, then probate would be required to distribute the house to her daughter.
What is included in my estate?
Your gross estate consists of anything that you own or have control over at the time of your death. This includes, your home and real estate, bank accounts, retirement and 401(k) accounts, stocks and bonds, cash, personal property, and life insurance, including death benefits. Assets held as joint tenants, tenants by the entirety or held in trust or with a valid beneficiary designation are excluded as part of your estate.
What is Medicaid planning?
Medicaid planning is multi-faceted; but, it primarily involves structuring your assets to become eligible for Medicaid benefits for long term care. Medicaid planning usually involves restructuring your monthly income and assets to meet the financial eligibility requirements and protecting them from having to be spent down.
How can an estate planning attorney help me?
Considering that one missing signature or one wrong word can change the entire outcome of an estate plan or – even worse – invalidate it, having a knowledgeable estate-planning attorney help you develop your estate plan is essential. Estate planning is state specific, which means that having an attorney that is well-versed in your state’s laws regarding estate and tax planning is key to developing a sound estate plan that will give you peace of mind that your affairs are in order. Additionally, working with a qualified estate planning attorney can help you avoid costly mistakes based on state specific formalities and nuances.