What is Estate Planning?
Thinking about the end of your life is never pleasant. Certainly, most of us would like to avoid thinking about our deaths. But failing to plan for this inevitability can have a lasting impact on the legacy you leave behind. Without estate planning in place, you lose the ability to control how your property will be distributed at your death and who will be in charge of your assets after you are gone. You also allow others to determine how you cared for in your last days. However, if you have a designed a plan in advance, you have the ability to control how these issues will be handled.
Many people believe that estate planning is essentially preparing a basic will. While writing a will is certainly important, the truth is that planning your estate involves forming a comprehensive strategy for your life and after your death. Simply put, it is the process of designing a plan that answers the following three questions:
- Who is going to make decisions for you should you be unable to make decisions for yourself?
- Where do your assets go when you die?
- Who is going to be responsible for distributing your assets, paying your debts, and managing your estate?
Once you have answers to these questions, your estate attorney can begin to map out a plan that meets your goals. Typically, a comprehensive plan is composed of these primary documents:
Many estate plans also involve the creation of trusts. These trusts can be used to avoid probate, give you power to control how a gift or bequest is used by the recipient, assist with tax planning, or help protect assets from creditors.
Why Should You Have Estate Planning?
If you do not have an organized, structured plan you cannot control:
- Who will make decisions for you if you cannot care for yourself. For example, if you are incapacitated and unable to make decisions for yourself, a family member or friend would have to petition the Court to establish for the appointment of a conservator to make decisions for you.
- Who receives your assets at your death. If you do not have a will or trust in place, state law determines how your assets will be distributed. These laws are called intestacy laws.
- Who is responsible for administering your estate once you have passed. If you have a will you control who manages your affairs after your death. However, should you pass away without a will, typically a family member or friend will ask the Court to be appointed the administer of your estate.
- Who will take care of your minor children. If you have a will, you can nominate someone to take custody of you children should you pass away. This nomination is not an appointment but rather an expression of your wishes as to who will care for your children in your absence.
When Should You Create an Estate Plan?
It is never too early to have a plan in place. We strongly recommend clients meet with a lawyer soon after they marry to establish a comprehensive plan. A good plan is even more important when you have children. When you establish a strategy you protect your family should something happen to you.
We also encourage parents to have their children execute powers of attorneys once they turn 18. When children turn 18 they become adults and the parents lose legally authority over their children. So when the child goes off to college or starts their career, it is a good idea for parents to have so that parents are able to make decisions for them should the need arise.
Planning for Second Marriages
In today's society second marriages are very common. These marriages present unique estate planning challenges. Under most circumstances, the need for a trust or will is especially important. Many married individuals with children from a prior relationship do not want to leave everything to their spouse. They want to guarantee that their children receive a portion of their estate at their death. This type of planning can be tricky as each spouse may have different expectations about what they should receive at their husband or wife's death. If you are in a second marriage, a well structured estate plan is critically important.
Choosing an Estate Attorney
Remember that estate planning is never a one size fits all. Every situation is unique and different and it is important that you hire someone that can tailor a plan that best suits your situation and circumstances. Contact John Crow today at 931-218-7800 to set up an initial free consultation to begin designing your plan.