You’ve spent your entire life working hard to accumulate your wealth and assets. Estate planning is the next step to ensuring your assets are protected and your final wishes are recognized upon your death or incapacity.
What is Estate Planning?
Estate planning means drafting a plan in advance and naming whom you want to make decisions for you in the event of incapacity as well as stating who will receive the things you own after you pass away. Estate planning includes deciding how an individual’s assets will be preserved, managed, and distributed after death. Estate planning should also factor any needs that you have as you age such as costs, preferences, and decisions surrounding medical care. It should also consider protecting more vulnerable beneficiaries such as minor children or persons with special needs.
It is best to think of estate planning as an ongoing process that can pave the way to an orderly transition as we age and face the everyday uncertainties of life. While we often hear of the importance of estate planning, the first thing that might come to mind when hearing that term is a Last Will and Testament. This document states how property should be distributed at death. If you die without a Last Will and Testament the default laws of the state you live in at the time of your passing will govern the distribution of your property. For some, these default laws may reflect their wishes, for many, these laws do not reflect their wishes in which case it is very important to have a proper succession plan in place.
Your Estate Planning Documents
While the Last Will and Testament is an important document most people should have, there are many important issues a Will cannot even begin to address. Only a Probate court can administer a Will which is one reason we recommend many clients use a Revocable Trust instead of a Will to pass their property. Probate is the court process for distributing property at death. All interested parties and creditors are required to be notified and must be given an opportunity to object to the planned distribution of your estate. In many cases probate can be a costly, time consuming, and public process.
Most people will benefit from having a Revocable Living Trust in place, either individually or jointly as a couple. Like your Last Will in Testament, a Revocable Trust is also a written declaration of who you would like to receive your property at your passing. However, unlike a Will, a Revocable Trust is a private document which allows you to pass property without the delays, cost, and publicity of going through the probate courts. A Trust can also accomplish a lot more such as protecting your family’s privacy; providing for your children, grandchildren, and pets; helping to plan for your incapacity; and protecting your property from lawsuits.
Planning for Incapacity
Most people are aware of the importance of planning for their death, however, many people overlook planning for incapacity. This is unfortunate since most people will be incapacitated at some point in their life, not having the proper documents in place can result in a costly conservatorship and guardianship proceeding. Thus, a comprehensive estate plan should address your financial and medical decisions in case you are not able to make these decisions for yourself. This point is generally addressed using financial and medical powers of attorney. A power of attorney grants a trusted loved one, of your choice, with the authority to make financial and/or medical decisions on your behalf in the event of incapacity.
As seniors age, they may not be as equipped to make serious financial decisions in a sound and prudent manner so an agent may be needed in helping them preserve their assets. The power of attorney can go into effect immediately or it can be structured to become effective later based on the advice of medical professionals. The appointed agent will have control over as many aspects of handling financial matters as the power allows. This can mean investing money or even taking steps such as depositing social security checks. In turn, the agent will have a fiduciary responsibility to act in the best interests for all financial decisions.
While the power of attorney can be general in nature, it can also be limited to certain areas. One of these areas can involve the ability to direct and make decisions for the medical care of another. This is important if it is difficult for a family to agree collectively on certain choices. As one ages and their faculties decline, they may not be in the best position to make decisions about their own care since it requires an understanding of their condition and the risks that they face. The medical power of attorney can apply in broad circumstances, even if there is not a terminal or critical illness.
Why Mile High Estate Planning?
No matter your age or life stage, it is never too early to make your wishes known and put a plan in place for your family’s future. Working with an experienced estate planning attorney can help you be better informed about the consequences of these important decisions as well as help you form and articulate your plans for many of these eventualities. A trained and competent attorney can then help you draft the appropriate documents so your wishes are memorialized for the time when implementing them becomes necessary.
At Mile High Estate Planning, we have worked with numerous clients over the years to find estate planning solutions that fit their needs. If you have any questions or if you would like to discuss the benefits of an estate plan, please call or email us today. We are always happy to meet for a no-obligation consultation at no cost to you. As your Estate Planning Attorneys, we will walk you through the estate planning process; explain available options, and answering questions until we determine the right path forward together.