Estate planning gives you the opportunity to integrate and organize your personal, professional, and estate goals. It allows you to preserve your assets for use now and in the future. You’re able to provide for your family, friends, and charities after you die. Estate planning can also ensure the efficient distribution of your estate and even save money when it comes to taxes, legal fees, and court costs.
Each estate plan is different and there is no one-size-fits-all estate plan. Laws differ in each state and each person has his own specific needs and wants. There are, however, basic components that comprise most estate plans: Last Will and Testament, Trust (in some situations), financial Power of Attorney, and Advance Health Care Directives.
Last Will and Testament
A Last Will and Testament is a formal legal document where you decide exactly how and in what portion you want your assets and property to be distributed upon your death. You can choose any number of recipients of your property, whether they be family members, friends, or charities.
In a Will, you decide who will be the person in charge of administering your estate, called the Personal Representative. Another decision you make in a Will is determining how final expenses and taxes are paid. An important aspect of a Will for parents is the ability to designate a guardian for your minor children. Without a Will expressing your wishes, the Court will choose who is appointed as guardian for your children. Also, you can decide whether or not the court should supervise the administration of your estate.
Do you really need a Last Will and Testament? Yes! It is the only way to express your wishes regarding your assets and property, your children’s guardian, and your administration preferences. Without a Will, your estate will be distributed according to the Indiana laws of intestacy.
Trust (Sometimes)
While trusts can be an important estate planning tool for some people, they may be inappropriate for others. Like a Will, a Trust can be used to direct how your estate assets will be distributed. A Trust can be set up during your lifetime or at the time of your death.
If you’re in pretty good health and don’t expect to owe estate tax at your death, then a simple Will may be enough. However, you may need something more complex if any of the following situations exist: you expect to owe estate taxes, you have a child or spouse with a special need, you have children from a prior marriage, or you think someone might contest your Will.
Some advantages of a Trust include planning to minimize taxes, protecting assets for minors, providing for a scheduled payout over a period of time, and shielding assets from your beneficiaries’ creditors. A Trust can be used during your lifetime to manage assets in the event that you become incompetent or simply wish to turn things over to another individual or professional trustee.
Trusts can avoid probate if you have out-of-state real estate. They can also be advantageous if you have minor beneficiaries because they can eliminate the need for a Court-appointed guardian. In some cases, families have relatives who are disabled. These families can utilize a Trust to help provide for their needs while protecting any public assistance benefits they may already be receiving.
Power of Attorney
A financial Power of Attorney gives the person you name in your document the authority to handle financial transactions. There are different types of Powers of Attorney, but the durable Power of Attorney lets someone manage all your financial affairs throughout your lifetime.
The attorney-in-fact can take care of a variety of tasks from depositing checks for you to handling retirement accounts to filing your tax return. Your attorney-in-fact does not need to be a financial expert, just someone you trust. The attorney-in-fact can always hire a professional to help them out if needed.
Advance Health Care Directives
Advance Directives for Health Care are actually three legal documents rolled into one: Health Care Power of Attorney, Living Will, and Appointment of a Health Care Representative. Together, they comprise one of the most important steps you can take in letting your family and doctor know what your wishes are for your own medical care.
Health Care Power of Attorney. You can choose a person to serve as your power of attorney for health care decisions during the times when you can’t make a decision for yourself. That person will be able to do any or all of the following:
Employ health care providers
Consent to or refuse health care for you
Admit or release you from a hospital or health care facility
Have access to your medical records
Make anatomical gifts
Request an autopsy
Make plans for the disposition of your body
Living Will. A Living Will clarifies your wishes for life‑prolonging procedures to be withheld or withdrawn so that you can be permitted to die naturally. Your attending physician must first certify in writing that: (1) you have an incurable injury, disease, or illness; (2) your death will occur within a short time; and (3) the use of life‑prolonging procedures would serve only to artificially prolong the dying process.
All medical procedures and medications which are necessary to provide you with comfort, care, and the alleviation of pain will be continued. In addition, you can make your wishes known regarding artificially supplied food and water. If, on the other hand, you wish to have medical procedures continued under such circumstances, you can sign a Life‑Prolonging Declaration rather than a Living Will.
Appointment of Health Care Representative. Your Health Care Representative will be the person who ensures your Living Will is enforced when you are unable to do so. This person will consult with your doctor as well as other family members, if appropriate.
Each of these documents serves a specific purpose and is an important element to your complete estate plan. Schedule an appointment with one of our skilled attorneys to create your personalized estate plan.