Estate planning is the process of anticipating and arranging for the distribution of the assets in your estate at your death.
In your estate plan you will name who gets what from your estate and when they will get it. Estate planning is intended to reduce or eliminate confusion and uncertainties with the distribution of your estate. Estate planning is intended to maximize the value of your estate by reducing the costs involved with resolving your estate and by seeking to reduce taxes that may be owed to the government.
What Does Your Estate Include?
Your “estate” includes all property that you own at the time of your death, including:
- Real estate
- Cash (bank accounts), stocks, and other securities
- Personal property such as automobiles, collectibles, artwork, and jewelry.
Estate Planning and Wills
Estate planning, for most, involve the preparation of a trust or a will. Many people benefit from having a living trust as opposed to just having a will. We are happy to discuss with you which one would be best for you.
- A revocable trust, sometimes called a living trust or an inter-vivos trust, will allow you to transfer title of your real estate into your trust and then avoid expensive and time-consuming probate. Distribution of your assets will take place according to the terms of the trust.
- If you make a will then it will include instructions about how your assets will be distributed to your heirs. If you have a will then your estate will most likely need to go through a court-supervised process called probate in order for your assets to be distributed to your heirs.
Essential Estate Planning Documents
There are two other important documents for you to consider with your estate plan, specifically an advance health care directive and a durable power of attorney for asset management.
- An advance health care directive, which used to be called a “durable power of attorney for health care” and in other states may be called a “living will,” is intended to assist in the making of health care decisions when you are unable to make those decisions for yourself. In your advance health care directive you name someone as your representative to make health care decisions for you if you becomes too ill to make your own health care decisions. A properly prepared advance health care directive permits a terminally ill patient to die with dignity and allows the physician or hospital to withdraw or limit life support.
- A durable power of attorney for asset management allows you to name someone to make financial decisions on your behalf if you were to become incapacitated. The person that you name to have your power of attorney will be able to protect your financial interests during the time that you are unable to do so.
Failing to plan is planning to fail. Contact us with any questions. We are here to help. For more information, read Estate Planning Basics and review our Introduction to Estate Planning and Checklist.