Estate Planning is an important area of law that helps secure your assets for the future and helps ensure that your family is taken care of when you are gone. Our attorney, Autumn Springfield, specializes in Estate Planning and can help you create a customized estate plan for your individual situation. Whether you have had recent changes to your marital status, a death in the family, or a newborn child, it is extremely important to evaluate your existing documents and make changes to keep your affairs in order. This page is designed to help you understand more about the documents involved in estate planning and get you started on creating your own plan for the future.
A living trust distributes property similar to the way a Last Will does, but it does so in a way that avoids the probate court supervision or interference. The technical difference between a will and a Living Trust is that the title to property is in the name of the Living Trust, and you, or you and your spouse, are the trustees. Since the property is not technically in your name when you pass, it does not have to go through probate, which is the legal process of verifying the legality of a will. In addition, a Living Trust is a private document, as opposed to a Will, which is available to the public. Many living trusts also incorporate credit shelter provisions to maximize tax savings for your heirs.
A Living Trust is a less expensive, less time-consuming, and securely private process to distribute assets after death. If you are concerned with avoiding hassles for your heirs, a living trust may the right choice for your estate plan.
Life Insurance Trust
A Life Insurance Trust is typically a trust for the benefit of your spouse and children in the occasion of death. This trust offers the opportunity of escaping taxes, not just in one estate, but in several. A life insurance policy that is placed in a Life Insurance Trust is considered to have no owner, thus once placed in a life insurance trust, you will not have the power to change or cancel the life insurance policy.
Here is how a life insurance trust works. Say you have a taxable estate and you estimate your estate tax is going to be $500,000. If your estate is mostly in the form of real estate or a business, your heirs may be forced to sell the property in order to pay the estate taxes on the inheritance. This is where the Life Insurance Trust comes in. Because the policy is not technically in your name, it is not subject to the estate tax and can instead be used to cover the tax on your other property such as the real estate and business. As far as typical life insurance policies, you can name your beneficiaries, but you have no control over how it is spent after your passing. An Irrevocable Life Insurance trust, because it is owned by the trust, the death benefits are out of your estate and the proceeds will automatically be used to pay the estate tax on your beneficiaries’ inheritance.
With changing estate tax laws, and the ability to secure a policy while you are young and healthy, a Life Insurance Trust may be a necessary addition to your overall estate plan.
Last Will and Testament
A Will is the most common document used for distribution of possessions after death. This document instructs a probate court on distributing your assets after all of your remaining bills have been paid. A properly drafted will defines which items or what percentage of the estate goes to which heir, when it goes to them, and how taxes are handled. A Last Will and testament can also contain legally binding instructions on funeral arrangements and burial procedures, a list of those who you would like to administer your estate, age restrictions on inheritance, and you can name those you want to take custody of minor children after your passing.
A Will, or alternate version such as a Living Trust, is essential in ensuring the future for your heirs and beneficiaries. A Will can help handle the distribution of your property, help save money on estate taxes, provide guardianship for your children, and keep money in trusts for young beneficiaries.
Advanced Healthcare Directive
An Advanced Healthcare Directive, also referred to as a living will, is a document where you can specify orders for doctors in extreme medical situations. These documents can serve as decision making orders in the case of life-saving measures such as life-support if you are in an irrecoverable coma or vegetative state. The living will, because drafted, signed, and notarized while in a conscious and sound state of mind, provides legal directives for doctors in these circumstances. This document takes the burden off of loved ones by allowing you to make these important decisions ahead of time.
Power of Attorney for Property
This document allows you to legally empower someone else to handle certain matters on the management and access to various properties. The extent of these powers are up to you, including the circumstances for empowerment and whether or not the powers are effective immediately, or only after you become incapacitated. Many individuals choose to empower their spouse with access and decision making rights about properties including real estate, bank accounts, tax matters, insurance transactions, personal property transactions and more. This plan is fully customizable, and you are able to tailor the allowances to fit your needs and wishes. The power of attorney expires after death, where the living trust or last will takes over.
Power of Attorney for Healthcare
A Healthcare Power of Attorney empowers someone else to make decisions about your healthcare if you are incapacitated. This document can ease the process of decision making if you become unconscious. These documents work in conjunction with the Living Will and can ensure that your healthcare decisions are made by specific people of your choosing.
If you are looking for assistance in creating the right Estate Plan for your situation, call us at Edmunds Law Firm today. We will meet with you to discuss your priorities, concerns, and goals to help create an estate plan to ensure the protection of your assets and the future of your beneficiaries. For a free consultation, call us at (800) 481-2526, or fill out a contact form on our website. Click here to request an immediate call back from one of our available attorneys.