We all need to have a plan for how to handle our estate. Estate planning is important at all ages, as no one can predict the future or the timing of catastrophic circumstances. Yet some studies show that 56% of the US population have not completed any level of estate planning. Estate planning can include, depending on your situation, any combination of the following: irrevocable trust, revocable living trust, will, pour-over will, durable power of attorney, health care power of attorney, and living wills.
There are many benefits to estate planning. Here are a few of them:
- You determine where your assets go when you die.
- You determine who will care for your minor children if you die or are incapacitated.
- You arrange for care to be easily provided for you if you become incapacitated.
- You arrange for your assets to be properly handled if you become incapacitated.
- After your death, your estate can avoid probate and be passed to your heirs in less time and with much less hassle.
- You make decisions in advance regarding the health care that you want.
What is probate?
Probate is a court procedure that occurs after a person dies to transfer that person’s assets to the proper people. Probate occurs when a person dies without having completed any estate planning or when a person with a certain level of assets dies with a will. It is possible to avoid probate for some or all of your assets by the creation of a trust.
Why should I have a trust instead of a will?
Not everybody should! This is a question that an estate planning attorney can answer for you. However, there tend to be some benefits of trusts in estate planning. First, a trust can help avoid the probate process, allowing assets to transfer faster to your loved ones after death. Second, depending on the type of trust drafted for you, your trust might be able to protect assets in the case that you ever need Medicaid assistance for long-term care or assisted living.
Why should I have an attorney create a will or trust instead of doing it myself?
As you probably know, there are many “do-it-yourself” will kits that you can purchase rather cheaply at stores or on-line. And they can work…if they are created correctly.
The problem comes when the will or trust was not created correctly. In some cases, the estate planning documents will be found to be completely invalid. In other cases, they are valid but do not properly account for appropriate tax planning, leave a large amount of assets to a minor child, or include other unwanted detrimental scenarios. Many people create a proper trust but then never fund the trust (which means that the properly created trust is worthless!).
A woman in Florida had her estate plan go all the way to the Florida Supreme Court! Her do-it-yourself will resulted in most of her estate going to the one person she did not want to receive it, plus enormous attorney fees and a decade’s worth of family fighting. None of that would have happened if she had properly prepared her estate planning documents!
Inman Law PLLC’s initial consultations are provided at no cost so that we can help you determine what level of estate planning is appropriate for you!