Why do estate planning?
Why do estate planning
The purpose of estate planning is to avoid what will happen if you do not prepare an estate plan. If you do not have powers of attorney (and possibly a trust) and you become in capacitated, then your family members in many cases will need to petition the court to become your conservator. A conservatorship is time consuming, expensive, and very restrictive, although it does offer the benefit of having a court supervise what is occurring in your life. While it might be perfectly acceptable in your case to die intestate (without a will), preparing a will or trust allows you 1) to direct who will be in charge of distributing or administering your estate on your demise, and 2) to direct how, when and to whom your assets will be distributed. While this may dovetail completely with intestate succession (how the Probate Code disposes of your estate), we find that most people’s distribution plan differs from what is provided under intestate succession. Also, intestate succession never takes into account tax planning and other issues that present themselves in most people’s lives.
Estate planning is an educational and a decision-making process that results in the implementation of the plan. Typically, you bring your information, ideas and concerns to our meeting. As your attorneys, we educate you about the elements of a good estate plan, answer your questions, and offer you guidance on things such as whether you need a will or a trust, whom to appoint and what your distribution options are. You make decisions regarding the elements of the plan. We draft the documents for your review, which are signed at another meeting after that. Usually there are some chores to do after the signing meeting as well.
A good estate plan involves four basic elements. It addresses:
- Who is to take care of your finances, personal care, and health care decisions in case you ever become unable to care for yourself, and what powers are to be given to those people. Documents for this purpose frequently include a trust, power of attorney for financial management, power of attorney for personal maintenance or care, Advance Health Care Directive, and HIPAA release.
- Who is to manage your estate after your death. (Trustees or executors are appointed in a trust and will respectively.)
- How, when and to whom your assets will be distributed either during your life or after your death. Documents describing distribution on death frequently include a Will, trust, beneficiary designations relating to bank or brokerage accounts, life insurance and retirement accounts, or combination of these.
- Any tax, business, or beneficiary-related issues, or other needs or concerns that may be pertinent to you.
Certain issues regularly arise in certain situations. If you are single or without children, there may be issues relating to who should serve as agent, trustee, or executor. If you are married or have children from more than one relationship, how much testamentary control should the surviving spouse should have over the estate? If you have minor or disabled children or children with certain needs, how do you best provide for them? If you own a closely held business, what do the existing business related documents say about post-death transfers, and are modifications to those documents necessary? If a significant portion of your estate is held in tax-deferred accounts, how are income taxes minimized on your death? Of course, this is not an exhaustive list. We are happy to discuss these and any other estate planning issues that you may have.