_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 6114Estate planning allows you to get your affairs in order in the event you become incapacitated or die. A will, which is the most basic estate planning tool, contains a written set of instructions to your loved ones as to how you want your estate to be distributed after your death.
If you die without a Will or any type of estate plan, your state’s intestacy laws will determine who will inherit your property. Intestacy laws may also determine who will act as guardian of your minor children. These laws do not consider personal circumstances or personalities, so your property and/or minor children can end up with a relative who you never would have chosen if you had the opportunity to establish an estate plan. In certain circumstances and in certain states, the state may benefit from the intestacy laws to a greater degree than your heirs.
To prevent this from happening, you should have an estate plan to distribute your property the way you want, when you want and to name a guardian for your minor children. However, keep in mind that a guardian named in your Will only takes effect after you die. If you are injured in an accident or you become incapacitated, your minor children may be taken into the custody of Child Protective Services until a guardian is appointed. Selecting temporary and/or permanent guardians can prevent this.
In addition, a properly drafted estate plan can help you avoid estate and inheritance taxes, avoid probate, avoid messy and costly court battles, protect beneficiaries and protect your assets from unforeseen creditors. In short, nearly every parent with minor children should have at least a Will. Further, any individual or couple having substantial assets, in addition to having a Will, should also consider tax planning to avoid estate and inheritance taxes.
In your plan, you want to proactively answer questions that may arise in the event of your death or incapacity. Generally, these questions will involve your assets, minor children, inheritances, health care directives and sometimes more.
Here are questions you should answer in your plan:
Many of us get uncomfortable when we think about dying and our family’s life without us. It’s not a topic anyone wants to consider more than once. However, it is critical that you take time now, while you’re healthy and in a good state of mind, to invest time in getting your estate, health and other affairs in order, and create an estate plan that reflects your wishes upon your death or incapacitation.
Estate planning ensures that your spouse and children, or whomever you appoint as your heirs, will have less difficulty taking control of your assets. If you were to die with property solely in your name, and no will to appoint a beneficiary, your estate could end up in probate. A court would then determine your estate’s assets and debts and disperse as seen fit. Working with an attorney specializing in estate planning will see that your real estate, cars, and other property are given to the heirs you choose. Consequently, having a will that details your final wishes prevents family squabbles. It is not uncommon for siblings and other relatives to come to blows over sentimental items like jewelry, antiques, or even land. Take the time to draw out distribution of these items and make your heirs aware of your intentions so that you can smooth any wrinkles before your time comes.
Planning ahead of time can help alleviate any tax issues your family will face upon your death. Inheritance taxes may prove a burden for some of your heirs, who may end up selling what they receive in order to pay off the debts. With a good estate planner, you can eliminate tax problems. If you believe some of your heirs will come to collect in their minority, it’s important to make sure their interests are protected. An estate planning attorney will help you appoint a legal guardian in the event this happens.
Everyone should have a will. That is a simple fact. If you have children or have any assets at all, it is absolutely essential to have a will. Even those without kids and with minimal possessions can also benefit from having a will since you will still need people to understand what you want to happen at the end of your life. While you may be tempted to try to create your own will, it is advisable in almost every case to speak with a estate planning attorney. A good estate planning attorney can help you to prepare a will for a very reasonable fee and there are many benefits to having legal advice for this important document.
There are a myriad of reasons why it is important to get legal advice from an estate planning attorney for both simple and complex wills. Some of those reasons include the following:
But because helpless people obviously need the assistance of an agent the most, most jurisdictions now recognize a “durable” power of attorney (abbreviated “DPOA”). A DPOA is “durable” because it is in effect even when the “principal” is mentally incapacitated.
While a non-durable power of attorney merely authorizes the agent to act as long as there is no incapacity, a DPOA resolves this problem by allowing a trusted agent, or nominee, to act even if the principal lacks legal capacity — or in other words when that person cannot legally make decisions on his or her own behalf due to mental disability.
A DPOA has specific benefits; in fact, I would go even further to state that nearly everyone with a formal estate plan should consider having one. Here are some of the benefits:
While very useful, the DPOA is not perfect by any means. One major problem is the possibility of abuse. While conservatorships are bulky legal proceedings, there is at least court supervision. The DPOA lacks supervision and abuses have occurred, all too often. While conservators must jump through many legal hoops, there is no active court supervision or “hoops” for an agent under a DPOA. Court proceedings can be filed, but that is often impractical. While court proceedings can be instituted to compel (for instance) the agent to submit an accounting or to revoke the agent’s authority, this is done all too infrequently. There is a big difference between a court supervised conservatorship, and filing a petition with the court.
In any event, who is going to file the petition with the court? Remember: The principal is mentally incapacitated! Comatose people generally can’t file probate petitions to compel their agents to account! Sure, there are risks, and they can be addressed somewhat (but not completely) through a well-drafted document and some common sense precautions. A DPOA may not be for everyone. However, everyone should at least consider a DPOA as an element of his or her estate plan. An effectively drafted DPOA can “round out” a comprehensive plan, and fill in the blanks not covered in trusts and wills.
The government wants you to die wealthy because it results in more cash for them. Therefore, they have a vested interest in you not taking advantage of laws and strategies which can result in your estate paying ZERO taxes. You may realize that there are only 3 real ways to reduce estate taxes: give money away while you are still alive, spend the money now, or use a specially-designed trust called a bypass trust that lets you give it away while you are alive while retaining use of the money for yourself. The IRS is banking on you being the kind of thrifty, careful person who has a hard time letting go of the money you so painstakingly accumulate, because they’ll have more money to TAX!
Often times, the beneficiaries of retirement accounts will change, particularly if the primary beneficiary dies before the account owner. In most cases, the account owner is required to complete a new beneficiary designation form, indicating the new beneficiary. Failure to do so might result in the beneficiary being determined under the default terms of the retirement account agreement. Payout options under most retirement plans often depend on whether the beneficiary is a spouse of the account owner.. There can be unintended and adverse tax repercussions for those who are not careful in this matter.
Specially designed whole life policies, such as those used in the Bank on Yourself ™ plans make inadequate life insurance less of a problem for those who choose that route.
However, for most people inadequate life insurance a BIG issue.
According to a recent Metropolitan Life Insurance survey, more than half of the widows and widowers who collected life insurance proceeds in the United States received less than one year’s income.
If you don’t have a will, the state decides who will care for your minor children. However, if you do have a will, be sure to review it regularly. Check to see if your original guardian is still valid and still willing to take on the responsibility. Things could have radically changed for your guardian such as their job situation or they could have new financial challenges.
If you have more than one child, the temptation is great to want to divide your estate evenly with all of them. After all, you reason, you love all your kids the same so it is only fair that each one of them gets the same share of your estate. Unfortunately this can be a great mistake, especially in the case of a family owned business. If you have children who participate actively in the business and others who do not, giving the non-participating child a share equal to the children who actually work the business can cause a lot of resentment and lead to family disputes. Consider giving shares of the business to your kids who actually work in it and then give non-business-related assets to your other children. If you feel that this creates an intolerable imbalance, talk to my office about how to correct such an imbalance by purchasing additional life insurance or other methods.
