Planning for you and your family’s future is one of the most important reasons to hire an estate planning attorney. Without estate planning documents, your life’s work is divided according to a scheme created by legislators in your state. Depending on the current state of the law, it may even be subject to a tax before it can be distributed to your family.
Rather than leaving your family with the myriad of regulations and filings required by your local court, I will work with you to create a comprehensive estate plan, so you will have the peace of mind that comes with knowing your estate is protected and your family is cared for.
Elements of an Effective Estate Plan
Everyone’s situation is unique, but an estate plan typically includes the following important documents:
- Last Will and Testament. Your will names an executor of your estate and outlines the distribution of your assets that do not already have named beneficiary designations.
- Power of attorney. If you were to become ill or injured and unable to speak for yourself, power of attorney gives the person of your choice the legal authority to manage your affairs. This includes tasks such as paying bills, depositing checks, and filing taxes.
- Healthcare proxy. A healthcare proxy gives the person of your choice the authority to make medical decisions on your behalf if you are unable to do so yourself. The person will follow your previously outlined wishes regarding resuscitation or other lifesaving procedures but use their own judgment to resolve any additional concerns that must be addressed.
A trust agreement isn’t necessary for every circumstance but is often used as a tool to avoid the time-consuming probate process, minimize tax liability, and protect assets from creditors. It is best thought of as a supplement to your will.
Additional Factors to Consider
Once you’ve got the basics covered, it’s time to think about your specific estate planning needs. This might include:
- Caring for minor children. If you’re a parent, who do you want to care for your children in the event of your death? What resources would this person need to be effective in their new role as a guardian?
- Providing for family members with special needs. If you have a spouse, child, grandchild, or other loved one with a physical or mental disability, simply gifting money outright can jeopardize their claim to valuable government benefits. I can help you create a trust that will provide for your special needs loved one in the most effective way.
- Planning for the future of your business. If you own a small business, we’ll discuss what steps should be taken to ensure the company continues to thrive and that its resources help your loved ones maintain their desired standard of living.
- Giving back. Many of my clients are passionate about helping others. If you’re interested in supporting a charitable cause as part of your legacy, we can discuss how the various options will affect your overall tax liability.
Estate Planning for Business Owners
Business owners often spend a lot of time working in and around their business. They take a deep dive into their industry, working hard and almost exclusively focus on their business. For those who don’t have them already, the business becomes like a child. Just as you need to protect your children with an estate plan, you also need to make sure your business is protected.
If you are a business owner, you want to make sure that your business and its operations and functions have a place in your estate plan. More than just a simple will, you want to have the right documents in place so that the right person is able to step in and run the business if you become incapacitated (the most common way to do this is through a power of attorney). This is a separate document from your healthcare power of attorney, which will appoint someone to make health decisions for you if you are unable to do so.
Your business hopefully has an operating agreement and has provisions that will say what happens if you retire or are no longer able to run the business. While this functions as a plan for the business, you’ll want to make sure your personal affairs are in order too with a properly thought out estate plan.
Estate planning for business owners is an important part of your business planning as well. If you’re running a business and haven’t had the time to create an estate plan, let’s set up a Legal Strategy Session to get things going and discuss the best options for you and your business.
The Ongoing Estate Planning Process
Once you’ve signed your documents, that doesn’t mean the process stops there. In fact, once you’ve signed the documents, it’s a good chance to examine other parts of your plan, like
- Cryptocurrency inventory
- Beneficiary Designations on Retirement Accounts
- Life Insurance Policies
- Real estate deeds that may need to be updated
- Temporary Guardianship Designations
- Meeting with your financial advisor
Usually, it’s a good idea to have your estate plan documents reviewed by an attorney every 2 – 3 years. Life can change quickly, but sometimes the changes are small, but begin to add up over a couple of years. Even if it’s just a couple of small changes, some people think this means re-drafting the entire plans, but most of the time, it’s nothing more than a review and possibly an amendment or two to the structure of your plan.
But as time goes on, you’ll find there can be changes in your life. Especially if there are major life changes (marriage, divorce, children, death), you’ll want to make sure that your estate plan keeps up with your family. These major changes can be stressful and can make life very busy, but it’s important to carve out some time to make sure your estate plan is reviewed. It only takes a meeting with your attorney, but it can save your family a lifetime of headaches from having to deal with an out-of-date estate plan.
There’s also another wrinkle to the entire process, one that none of us controls, and that is changes to the laws, either from the federal government or your local state government. When you sign your plan, it could be the best-designed plan for that current set of laws. But a few years later, the government is now controlled by a different political party and your plan could leave your legacy in jeopardy to a whole new legal structure. If you’re not sure what the current state of the law is, it’s a good time to set up a review with an attorney to make sure your legacy is protected.
If you’re not sure if it’s time to have your estate plan reviewed, there’s a quick survey that you can take to see whether it’s time or not.