Estate planning is the last thing most people want to think about, but it is essential to the security and protection of your family. With a well-established plan, you can help your family avoid conflict and confusion after you pass away. You can also ensure that your specific wishes are carried out. Estate planning includes items such as wills, trusts, powers of attorney, and advance health directives.
General Estate Planning
Two of the most common estate planning tools are trusts and wills. Most adults have a basic understanding that a will is a legal document that details how assets are divided among family members and other inheritors. Less people, however, are familiar with how a trust works. Let’s take a quick look at both types of estate planning:
- Trusts – Property can be held in trust for beneficiaries. Trusts are often set up to lower or avoid estate taxes after you pass away. Trusts can also prevent your estate from having to be probates after your death. Trusts can save you family time and thousands of dollars. They can also ensure privacy of your legacy. Unlike a will, you can make arrangements for property and assets held in trust to be distributed while you are still alive. The many different types of trusts allow for your wishes to be carried out successfully. Common types of trusts include spendthrift trusts, charitable trusts, and special needs trusts.
- Wills – A will is a legal document that details who will inherit your property and assets, and under what conditions that inheritance will take place. To make a will, you must be of sound mind, and you should appoint an executor to carry out your instructions after your death. There are certain legal formalities that must be met in order for a will to be valid. Schedule a free consultation to determine if your will is in compliance.
There are several differences between a will and a trust, including the fact that a will only becomes valid after you die, whereas a trust can be effective while you’re still alive. A will must also go through probate, which is not required of a trust. A will becomes public record, while a trust remains private.
Some estate plans are most effective by having both a will and trust in place.
An estate-planning lawyer can also help you with various types of deeds, including:
- Transfer On Death Deeds – These are similar to standard real estate deeds that transfer property from one person to another, but in this case, they are only effective after you pass away. This deed allows your beneficiaries to skip the probate process when it comes to real property.
- Ladybird Deeds – This type of deed is commonly referred to as an enhanced life estate deed. It allows you to retain control over a piece of property while you are alive, and transfer that property to a beneficiary without having that person go through probate. It can be an effective tool for any person who may have a Medicaid liability after passing away. There are also tax advantages associated with this type of deed.
Medical Planning and Medical Directives
Estate planning also involves making decisions about what happens if you become sick and are unable to communicate how you want your health care matters handled. Common types of planning include:
- Advanced Directive – A legal document that details how you want your family and health care providers to handle critical life decisions when you are unable to make those decisions in person.
- Medical Power of Attorney – A legal document that lets you name a person to make decisions about medical treatment. You can choose to make it effective immediately or at a future point in time. You can also choose to revoke it.
- Disposition of Remains – A legal document that details what should happen to your body after you pass away (cremation, burial), and who will authorize that disposition.
Estate planning is complex. Doing it wrong can be financially and emotionally devastating. Elissa I. Henry Law Firm, PLLC can help you. Contact us today for a free consultation.