What Are The Basic Items Or Components In An Estate Plan?
I include, in every single plan, a financial power of attorney. This is an extremely important tool that your family would use in the event that you become incapacitated, and would allow them to have some basic control over your assets, be able to manage property for your benefit, and be able to make financial decisions on your behalf. The second very important document I include is a medical power of attorney. It serves a similar function to a financial power of attorney, except you nominate someone to make medical decisions on your behalf if you couldn’t. It is really important to make sure that you have decided who you would want to manage your finances and your medical decisions in the event that you cannot, because otherwise your family will have to sue for guardianship rights over those decisions in the probate courts.
Another document I include, if the client wishes, is a directive to physicians, also called a living will. This is the document that, in a standard living will, states that if you are terminally diagnosed, unconscious, and there is no hope of recovery, you would like to be removed from life support. Also, sometimes your family members can’t even get access to your medical information because they don’t have the proper HIPAA forms in place. We always include those as well. Finally, the most important document for after you have passed away is your will or revocable living trust to transfer your assets to your beneficiaries.
If you have a properly drafted will, it will allow your family to present it to the probate court and transfer your assets into their names. Sometimes, it also makes sense to have a revocable living trust in place. There are many reasons to have a revocable living trust and the biggest one is incapacity planning and ensuring that your family would be able to manage your assets over the long haul. The second biggest reason people have them is to avoid going through the probate process altogether and giving the family access to the finances more quickly. Lastly, a revocable living trust is a great tool to provide asset protection to your children, such as protection in the event of a bankruptcy or divorce.
How Long Does It Generally Take To Create An Estate Plan?
From my initial meeting with clients, it typically takes about four weeks to create their estate plan. We’ll design the estate plan in our first meeting and then, we will have our second meeting, once the drafts have been prepared, to review the documents and ensure that they are accomplishing the family’s wishes. From there, we schedule a signing meeting to bring in our witnesses and put the documents into effect.
What Is A Trust? What Are The Advantages And Disadvantages Of Having A Trust?
A trust is a way to privately manage your assets and it can accomplish a lot of different things. For example, a revocable living trust is a very effective tool to have in place if you were ever to become incapacitated. It’s the best document we have to allow one of your family members to manage your assets, if you ever were to need help. Another benefit of a revocable living trust is that if you place your assets into it, then when you pass away, your family members don’t have to go through probate to retitle the assets. Whomever you have chosen as your successor trustee can immediately take control of your assets, rather than having to hire a probate attorney and wait several months to go in front of a probate judge. The biggest advantage is that whether you are going through an incapacity event or going through probate, this all takes place in the privacy of your own home.
Perhaps the biggest advantage to having a trust is the asset protection you can provide to your family after you pass. With the right plan in place, you can make your children’s inheritance completely protected in the event one of your children were to go through bankruptcy, or more commonly, a divorce.
If you have property in multiple states, it oftentimes makes a lot of sense to have a revocable living trust in place because you actually have to go through each different state’s probate system for which you own property. That can greatly increase the time and expense that it takes to get through the probate system. If you place your assets in a trust, you don’t have to do that.
Other uses for trusts are if you have a family member with special needs and you want to utilize asset protection. There are a lot of different things that we can do. The disadvantage to trusts are they are more expensive to have set up than a basic will based estate plan. However, they can do a lot to simplify and make managing your assets much easier on your family, and are typically a great investment over the long run.
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