What Is Estate Planning?
It is preparing for what happens to your assets before and after you pass away. It involves deciding who manages your properties while you are alive and to whom you pass them on after your death.
The goal of an estate plan is to ensure that your wishes are carried out, and your loved ones are well taken care of after you’re gone. It can also include making arrangements for healthcare and end-of-life decisions.
There are various estate planning tools that you can use to protect your loved ones and prepare for various situations in the future.
Do You Need A Will & How Do You Prepare One?
A will outlines your wishes for the distribution of your assets after death. You can define who will manage your estate, who inherits what, and how distribution is done. On top of that, you can use a will to name a guardian for any minor children you may have or to state your preferred funeral arrangements.
This document is a critical component in an estate plan. It provides clear instructions on asset distribution. This helps prevent disputes and confusion among your loved ones after you’re gone. Here is a quick checklist to give you a general idea of how to create a will.
- Determine what assets you want to include in your will.
- Decide who you want as beneficiaries.
- Choose a representative to manage your properties and ensure the distribution follows your wishes.
- If you have children, choose an individual who will be their guardian.
- Create your will and sign it with two witnesses.
- Ensure the safety of your will by storing it properly.
Now that you better understand a will, it is time to talk about other tools you can use together with a will to build your estate plan. Several tools, like trusts and powers of attorney, are usually used alongside a will. They serve different purposes and can strengthen your estate plan. It’s always a good idea to consult an estate planning lawyer to determine how to approach your situation best.
What Is A Trust & How Can It Help You?
A trust is a legal arrangement where one person, called the “grantor”, authorizes another, called a “trustee,” to manage the former’s assets for the benefit of a third person, called the “beneficiary”. Trusts can help protect estates, reduce taxes, and provide for beneficiaries after the trustor’s death. The trust document outlines the conditions for how properties are managed and distributed.
There are different types of trusts you can create to ensure the protection of your properties. A trust lawyer can help you decide which one best suits your needs.
Irrevocable Trust
In an irrevocable trust, the grantor permanently transfers ownership and control of their assets to the trust. After the transfer, the terms can no longer be revoked or changed. The trustee manages and distributes estate property to the beneficiaries based on the trust conditions.
This type of trust is used in estate planning to help reduce estate taxes or to protect the estate from creditors. If you want to set up an irrevocable trust, you must carefully consider its terms because you can no longer take it back once it becomes binding. Consult a trust attorney to know how this type of trust helps you achieve your goals and protect your interests.
Revocable Trust
In a revocable trust, the owner names themself as the trustee and keeps ownership and control of the trust assets. They can modify the terms as long as they are alive and of sound mind. The trust names a successor trustee authorized to take control of the properties when the owner passes or is incapacitated.
A revocable trust is often a flexible and convenient estate planning tool. It can help avoid a lengthy probate process. In a probate, the court identifies and distributes the deceased’s assets to the beneficiaries. The time it takes to complete this process depends on various factors, including the size of a person’s estate. When assets are put in a trust, they are no longer part of the deceased person’s estate and can be given directly to the beneficiaries.
However, because the owner retains the assets, they are still open to estate taxes and debt collection. Consult an estate planning attorney to see if a revocable trust is helpful in your case.
Charitable Trust
A charitable trust is another type where the beneficiary is a charity. The causes can vary, including education, science, religion, poverty, health, and others. The grantor donates assets, such as cash, securities, or real estate, to the trust. The trust manages the assets and distributes any income or the principal to the designated charity.
There are two main types of charitable trusts:
- Charitable lead trust – pays income to a designated charity for a specified period. Any remaining assets after that will be distributed to the grantor or other beneficiaries.
- Charitable remainder trust – earns income for the grantor or other designated beneficiaries for a limited time before distributing the remainder to the charity.
Special Needs Trust
Another type is the special needs trust. Grantors usually draw up a special needs trust to address the needs of loved ones with disabilities. Certain types of assets disqualify a person with a disability from receiving Medicaid or Supplemental Security Income (SSI). The purpose of the trust is for the grantor to be able to pass on properties to their special needs beneficiary without disqualifying them from government benefits.
With an SNT, the trust will hold any money or property the grantor gives to their loved one with special needs. This will not be counted against their eligibility for government assistance.
If you have a loved one with special needs, protect their future and interests and consult a trust attorney to help you draw up the terms of the trust.
Long-Term Care Planning
70% of American adults over 65 develop long-term care needs. However, most Americans have no long-term care plans. How and when do you prepare for old age? The answer is, right now, while you still can! Talk to an estate planning lawyer to discuss what you can do to prepare for the future.
Long-term care refers to a range of health and personal care services for people who cannot do it alone. These services include assistance with activities of daily living, like bathing, dressing, and eating, as well as medical care and therapy.
Depending on financial means and circumstances, long-term care can be at the person’s home, assisted living facilities, or nursing homes. Home caregivers can either be professional carers or family members. So what will you need to look into when considering a long-term care plan?
- Funding: How are you going to pay for it? You can consider either paying costs out of pocket or through government programs. A Genworth Cost of Care Survey in 2021 puts the national median price between $4,957 for homemaker services and $9,034 for a nursing care facility private room.
The National Institute on Aging mentions several ways of paying for long-term care. The list includes personal funds, government programs like Medicaid, and private financing options like insurance and reverse mortgages. It helps to have at least a general idea of the cost and various ways to cover it when planning for your long-term care.
- Type of care: Do you have a family member who is willing and able to provide care? If hiring a carer, is your home suitable for home care? These are just some of the things you need to consider when deciding what type of care best suits your needs and resources.
Speak to an estate planning lawyer about the best solutions to your long-term care needs.
Probate
Probate is a judicial process where the court oversees the distribution of a person’s assets after the latter’s death. The properties are transferred based on the decedent’s will, if there is one, or by state law, if there is no valid will.
The court appoints a personal representative to manage the subject estate. They will be responsible for notifying creditors, paying any outstanding debts or taxes, and distributing the assets to the rightful heirs or beneficiaries.
How long the process takes depends on factors like the estate size, the number of beneficiaries, and any disputes concerning the assets, among others. Additionally, probate proceedings appear on public record, which the bereaved can find intrusive. That’s why some people try to avoid probate by creating a living trust or using other estate planning tools. This simplifies the distribution of assets and ensures that they are passed down to the correct beneficiaries.
Financial Planning
Preparing for the future does not mean you need to skimp on life’s pleasures today. You and your family can still enjoy the present while ensuring a comfortable future ahead.
Build your financial plan with the help of an experienced legal professional. Financial planning involves setting your personal financial goals. To do this you need to have a good grasp of your current finances so you can develop a sound plan for achieving your goals. Here are some of the things you need to do to build a financial plan:
- Create a budget.
- Save for retirement or other long-term goals.
- Invest in the stock market or other financial instruments.
- Manage your debt.
Financial planning gives you security and peace of mind. Create a plan, stick to it, and take control of your finances. Keep an eye on your progress and make sure that you are on track to achieve your goals. Keystone Law Firm will work together with you, prioritize your financial interests, and provide ongoing support to ensure that you meet your objectives.
Tax Planning
Another way to maximize your resources for future financial security is through tax planning. This simply means taking stock of your finances to find ways of minimizing tax liability. Identify eligible tax deductions, exemptions, and credits. Then make sure that you make budgetary arrangements so you avail of these benefits.
Disabled & Impaired Adults
Disability is an eventuality that everyone wants to avoid but no one can really tell the future. One thing is for certain, if you’re prepared for it, you and your family will be far better off. Whether you are planning for the possibility of becoming disabled or impaired or you are doing it for a loved one, it is best to work with a knowledgeable estate planning lawyer.
A good one should be able to guide you on the best legal tools and strategies for your family’s circumstances. The goal is to be able to secure the finest care for you or your loved one, as well as designate someone with your best interests at heart.
How An Estate Planning Lawyer Helps
Estate planning does not have to be intimidating. A trustworthy and competent estate planning attorney can help you establish a plan that suits your needs and resources. Among other things, they can also help you with the following:
Identify Your Goals
An attorney that knows what they’re doing will start off by identifying your objectives. What do you want to achieve? They attentively listen to your goals and how you want to manage your assets. Then, they carefully analyze it to help you create a suitable estate plan.
Create An Estate Plan
Once your goals are clear, the attorney will apply their knowledge to build a plan, including various tools you need for a robust estate plan. This can include drafting wills, trusts, tax planning, and long-term care planning. They can help you identify the right tools that can help meet your objectives and walk with you every step of the process.
Keep Your Estate Plan Up-To-Date
As years go by, life happens and things change. You may get married, have more kids, move to a different city, or perhaps laws and regulations change. Your estate plan must be regularly updated to reflect these changes. This ensures that the plan remains in line with your goals.
They Can Provide You With Peace Of Mind
A carefully laid plan drawn up by a reliable attorney gives you peace of mind knowing that your legal documents are binding, your estate plan is current and reflects your goals. You can now be confident that you and your family are prepared for whatever the future holds.
Keystone Law Firm
Recent studies show that only 34% of Americans have an estate plan. The top two reasons why people don’t plan are:
They don’t think they need an estate plan because they don’t have a lot of money or properties.
They haven’t gotten around to making one.
Estate planning is not just for the rich. You need one to ensure whatever property you have goes to the right person when you pass, to prepare for future medical needs, or to see to it that your loved ones are somehow cared for.
Keystone Law Firm understands the necessity of preparing for the future. The firm is home to estate planning attorneys who listen attentively to each person’s concerns and goals. They take great pride in being problem solvers who can create plans that meet their clients’ needs.
Estate planning lawyers can provide you confidence and peace of mind in knowing you have done what is necessary to protect your assets and loved ones. Let Keystone Law Firm assist you as you create a secure future for yourself and your family.
