Estate planning is one of the more important aspects of life planning. The process involves executing legal documents that provide directives regarding inheritance gifts and estate settlement procedures to ensure relatives are looked after upon death.
A lot of people dread estate planning, but it really isn't that difficult. The best course of action is to work with professional estate planners or probate attorneys to figure out which strategies offer the highest level of protection.
Every person of legal age should write a Will. This document is used to bequeath general and specific gifts to relatives, friends, and charitable organizations. It is also necessary for arranging legal guardianship of minor aged children.
Even if a person has very few assets, writing a Will helps to expedite the probate process. Probate is the protocol used in theU.S. to close estates. The process involves validating the last Will; notifying creditors and settling outstanding debts; contacting government entities such as Social Security, Medicare, and Veterans Administration; and distributing estate assets to rightful heirs.
When a Will is provided, the probate process is known as 'testate' and the estate is settled in accordance with written directives supplied in the Will. The process for settling testate estates typically takes 2 to 4 months, but can be prolonged if lawsuits are filed against the estate or if heirs contest the Will.
Any time a person passes away without executing a last Will the probate process is referred to as 'intestate'. Estate assets are transferred to direct lineage heirs such as the surviving spouse, children, siblings, and parents in accordance with state probate laws. Settling intestate probate estates takes additional time and is typically extended by a few months.
Setting up estate planning strategies isn't difficult, but can be made easier by working with probate and estate planning lawyers. This is even more important for individuals with minor children and valuable assets that are secured with a title, such as real estate.
Another vital element of estate planning is designating power of attorney privileges. Power of attorney is used to grant authority to another person to take care of various tasks. These can range from taking care of personal finances to making healthcare decisions.
Most power of attorney forms are only for use while a person is still alive and capable of making decisions on their own. If a person is declared incompetent or passes away, POA is no longer in effect.
One way to ensure decisions can be made and certain duties can be performed after declaration of incompetency is to setup a Durable Power of Attorney. The majority of POA forms established for estate planning is durable, but there are instances when a person will want to setup Special or Limited power of attorney forms. The best method for making certain the proper kind of POA form is used is to hire an estate attorney.
Setting up an advance healthcare directive or living Will is important for people that want to have some say-so about medical treatments and procedures. This document allows people to put their end-of-life choices in writing and can eliminate burdens for loved ones.
Individuals need to appoint a health care agent that will be given legal authority to make health care choices in the event they can no longer speak or are declared incompetent by their physician.
It is imperative to discuss the kinds of medical treatments that you want to receive or are opposed to with your physician and family members. Written directives are also presented in the living Will to provide a clear statement regarding treatments that should or should not be used to prolong your life.
Setting up estate trusts can be advantageous for people that want to keep their financial affairs private; avoid probate; leave money or provide educational funds to minor children; or minimize inheritance taxes.
Trusts are often used by people with larger estates and should be setup by estate planning lawyers. Professionals can help people decide if they need insurance trusts, grantor-retained interest trusts, or Crummey trusts.
Estate planning isn't just reserved for the wealthy. Everyone can benefit from writing a Will, setting up power of attorney forms, and establishing health care proxies. Doing so not only expedites the probate process or avoids it altogether, but also makes settlement proceedings considerably easier for estate agents.
At Craton & Switzer LLP, we offer a variety of estate planning strategies to help clients avoid estate litigation. We welcome inquiries and are happy to answer questions or setup consultations to discuss your needs. We also encourage you to review our estate planning article library that provides additional details of each individual estate planning strategy.