I get lots of questions from family, friends and potential clients about estate planning, so I thought that I would summarize the four that I get asked most frequently in this blog.
- What happens if I do not create an estate plan? If you do not have an estate plan, your estate will go thru probate and will be distributed via your state’s intestacy laws. Probate is a state-mandated process that may be expensive and time-consuming, and it takes place in the public domain. You will likely pay more in taxes, and you will almost certainly pay more to the legal system through attorneys and court costs. Additionally, you lose control over who receives your assets and – most importantly – over whom would raise your minor children. In fact, court approval would be required to do even the most basic of things, such as paying your spouse an allowance, paying recurring bills and accounting for your property. A well-executed estate plan results in more favorable results all around.
- Should I create a health care power of attorney? Yes. A health care power of attorney allows you to designate someone you trust to make important health-related decisions on your behalf if you become mentally or physically incapacitated. Alternatively, in the absence of this designation, you could be subject to an expensive and potentially humiliating conservatorship or guardianship proceeding pursuant to which the probate court will appoint someone to take control of your assets and personal affairs.
- What is the difference between a Will and a Living Trust? A Will is a legal document that takes effect upon your death, and describes how your assets should be distributed after death. A Living Trust is a legal instrument that takes effect upon its creation and its funding allows you to maintain control of your property now and after death. One of the biggest differences between the two is that a Will must go through probate, whereas a properly-drafted and funded Trust will avoid probate. You may be the trustee during your lifetime, and upon any specified event of your choosing including, but not limited to, your death, the successor trustee you have selected gains control of your assets and distributes them according to your instructions.
- Is estate planning just for the rich? Absolutely not! Proper estate planning is important for anyone who has any assets and/or beneficiaries. If you have any assets, children, other close relatives or friends or a favorite charity or social club, then you should at least consider preparing an estate plan. Proper planning now will cost your estate – and your intended beneficiaries – only a fraction of the cost they will incur in the probate process. More importantly, proper planning now helps avoid many of the potential disputes and/or much of the emotional trauma that may result from a disputed will and/or an expensive, public probate process.
For assistance with any legal needs related to your business or estate planning, contact Fournier Legal Services at firstname.lastname@example.org or 860.670.3535 now for a free consultation and planning session.