_location_geocentric domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /var/www/parklinlaw_c_usr/data/www/parklinlaw.com/wp-includes/functions.php on line 6114A comprehensive estate plan includes four estate planning documents. These documents include a will, a financial power of attorney, an advance care directive, and a living trust. A Will Distributes Assets. A will states who assumes ownership of your assets and belongings after you die. If you don’t write a will, your assets are distributed according to plans outlined in your state’s intestacy laws.
Creating a will is the only way for you to control who gets what. You have the freedom to leave your assets to friends, family, or charities in the amounts you wish. In your will, you also choose an executor. This is the person who will make sure the terms of your will are carried out exactly as you want.
A will is crucial if you have children under the age of 18. In the will, you can name a guardian who will care for your children should you die before they become adults.
It’s important to keep in mind that a will does not control the distribution of all assets. A will cannot distribute:
A power of attorney document authorizes the person you choose to handle financial matters on your behalf if you are not able to. Each state has its own rules regarding power of attorney. You can set a power of attorney up to become active only if you are incapacitated, or you can create it so that it is effective immediately if you want to use it for convenience, such as when you are out of town. The power of attorney only applies to the specific types of matters and transactions you authorize in the document. A financial power of attorney does not grant the authority to make medical decisions on your behalf. It is only effective during your lifetime, so it is no longer active once you pass away.
An advance care directive is a document that states what your wishes are for medical and end-of-life care should you be unable to make those decisions for yourself. You can spell out exactly what you do or do not want—for example, ventilators and feeding tubes. This document is sometimes called a living will. In some states, you can include the person you select to make the decisions for you if you are unable to in this document. In other states, there is a separate document for that, called a health care power of attorney.
A living trust allows you to take assets you own and place them into the ownership of a trust you create during your lifetime. The trust owns your assets and manages them while you are alive. After your death, the trustee—the person you choose to manage the trust—distributes the assets to the beneficiaries you have chosen. A living trust is private and does not go through probate court. Your estate saves the cost and time involved in a probate proceeding and instead distributes assets on its own, immediately, if that is what you wish.
A revocable living trust—one you can make changes to during your life—does not avoid estate taxes if your estate exceeds the estate tax exemption set up by the federal government and your state. A living trust does not remove your assets from your use during your life. You can use your assets as you wish while you are alive. Ensuring that you have these important documents for estate planning in place will allow you to fully prepare yourself and your family for whatever the future may hold the public.
Though older adults acknowledge the importance of estate planning, nearly half of Utahans over 55 do not have a will. Many of us think of wills as the main element of estate planning, but appointing a designated power of attorney, creating a living will, and establishing beneficiaries are all essential parts of your estate plan. An estate plan is truly a gift to your loved ones. Without these important documents, your family may be burdened with many obstacles at the end of your life. Sometimes, if there is no estate plan to refer to, it can even cause conflict among family members. No one wants family turmoil! At the end of your life and after your passing, the documents in an estate plan give your loved ones the information they need to make sure the right decisions are made on your behalf, and your assets are smoothly passed down according to your wishes.
What Goals Can Estate Planning Address?
Estate Planning Checklist
Want to start putting together your estate plan but don’t know where to start? Use the estate planning checklist below!
In addition to drawing up your will and trusts, you’ll also have to choose an executor. Your executor will be responsible for administering your assets after your death and ensuring your final wishes are met. An executor’s duties may include:
Often, people choose a family member, such as a child or spouse, to fill this role. You can also select a friend. What’s important is to make sure you pick someone who is dependable, trustworthy and organized. Also consider a person’s age and health, as you want your executor to be around after you’re gone. If your chosen executor lives in a different state, be sure to check your state’s laws as there may be requirements regarding an out-of-state executor.
If you don’t come up with an estate plan, your state will take control upon your incapacitation or death. If you become disabled, the court will determine how your assets will be used to care for you through a conservatorship or guardianship. Similarly, if you die without an estate plan in place, your state will distribute your assets according to its probate laws.
As you might have guessed, these scenarios can have significant downsides, as you will lose control over who is in charge of your care or how your assets are distributed. If you have minor children, the court will take control of their inheritance. In the instance that both you and your spouse died, the court would appoint a guardian for your children.
In other words, estate planning is crucial no matter your age or level of wealth. You want to have a say in where your assets end up and ensure your loved ones are adequately cared for should something happen to you.
One of the most obvious estate planning considerations is making sure your Will is updated. Anyone who is over the age of 18 and has any assets should create a Will. Wills are fairly inexpensive to arrange, but they can make all the difference in how your estate is distributed after your death. If you don’t have a Will, the state will decide how your funds and other assets will be distributed. This situation often leads to legal challenges from dissatisfied or estranged family members or other interested parties. As you can imagine, situations like these are long, difficult, and costly. It’s best to avoid these problems by creating a Will. With a Will, you can decide who will inherit your assets: cash, investments, property, vehicles, jewellery, art, and other possessions. You can also use your Will to tell your loved ones about your wishes for your funeral and burial or cremation.
Your insurance policies, super account, and other investment accounts all let you designate beneficiaries to receive funds after your death. If you haven’t already done so, you should also set up a Death Nomination or Reversionary Beneficiary for your super account. Your super account isn’t automatically paid to your estate to be distributed according to the instructions you leave in your will, but this document will make sure it happens as you specify.
This may be one of the most important things you do as you plan your estate. If you were to die tomorrow, what would happen to your dependents? Do you have a plan in place for them, including guardians who will care for them and funds for their upbringing and education?
Inheritors are often hit hard with the Capital Gains tax, but there are things you can do with your estate planning to minimize the effects of such taxes. For example, super fund benefits are tax-free if the beneficiary is a “Death Benefits Dependent” (child under the age of 18, spouse, former spouse, or interdependent relation). Depending on whom you designate as beneficiary, you could avoid taxes. There are also other ways to minimize taxes paid by your beneficiaries.
Many people find that while they’re setting up their Wills, they also arrange for the creation of an Enduring Power of Attorney (EPA). An EPA is someone appointed to manage your affairs if you are incapacitated and can’t make decisions yourself.
Similar to an EPA, an Enduring Power of Guardianship allows someone else to make medical decisions for you in the event that you’re mentally unable to do so. Of course, this would have to be someone you trust implicitly and who understands your wishes and will carry them out.
A trust created according to your Will, a testamentary trust may help you to distribute your estate in a more tax-effective manner, and it can also reduce the risk of challenges to your Will. There are several types of trusts (discretionary trusts, special disability trusts, etc.), and the type of trust that’s best for you will depend on your goals, your family situation, and other factors. Trusts can be especially useful if you have dependents who are under the age of 18. It designates a trustee to manage your beneficiaries’ inheritances until you would like funds to be paid out to them. Trusts may carry risks, however, especially of other parties make claims against the trust in court.
An Advance Health Directive is another document you can use to lay out your wishes in case you are incapacitated and can’t make decisions for yourself. It allows you to express your wishes about medical treatment and how you’d like your body to be dealt with if you’re involved in an accident.
As a part of your Will, you’re required to name an executor who will carry out your wishes and distribute your estate. These duties can be extensive: collecting assets, paying debts, making sure benefits are paid to heirs. That’s why it’s so important to choose an executor you trust who is willing to manage this responsibility.
An attorney can give you insights into your estate planning that will help you to further refine and safeguard your estate. If you haven’t talked through your plan with Parklin Law, give us a call today. We’ll be happy to answer your questions and offer any assistance you might need.
