What is Estate Planning?
You may have heard the phrase “estate planning” before. But what exactly is estate planning? Well, estate planning is the process of planning for your incapacity or your death. To that end, it answers a few very important questions:
- Who will be in charge of your financial affairs should you become incapacitated and unable to make decisions for yourself?
- Who will be in charge of your medical decisions if you cannot make choices?
- Who will receive your assets at your death?
- Who will be in charge of managing your estate after you are gone?
- Will your estate be centered around a will or revocable living trust?
Tools of Estate Planning in Hopkinsville
When planning your estate with a Hopkinsville estate planning attorney there are several tools that should be discussed:
- Revocable living trusts
- Financial power of attorney
- Medical power of attorney
- Living Will
Each of these tools are useful in different circumstances, but they each play an important part in your overall estate plan.
Planning for Incapacity
We never know what the future holds. Life can change in an instant. Whether it is a major car accident, an illness, or a disability, the future is always uncertain. So how do we prepare for this uncertainty? One of the best ways is to make clear in your estate plan who you want managing your finances and health care decisions if you become incapacitated. Appointing such an agent requires the execution of powers of attorneys. A Hopkinsville estate planning attorney can walk you through the different contingencies that need to be put into each power of attorney. For example:
- In appointing an agent over your finances, do you want that person to have power to act immediately?
- Do you only want the agent to have the power to act only upon a doctor declaring you incompetent?
- Who will be your back up or alternative agents?
Another point to consider with incapacity is a living will. A living will is a document that provides your advance directives as to whether:
- You wish to have a feeding tube and life sustaining fluids hooked up to you; and
- Whether you want to be an organ donor.
A living will is a critical part of your estate plan. When you speak with a Hopkinsville estate planning attorney make sure you tell them your choices to these questions.
Planning Your Estate
One of the most important aspects of planning your estate is knowing that your legacy will be protected. Undoubtedly, you have accomplished much in your lifetime. You have worked hard. Built a family. You have much to be proud. Don't you want to protect this legacy that you have created? To do that, you must choose how you want to protect that legacy, and allow it to be built upon after you are gone. This is where estate planning comes in.
Creating a Will for your Estate Plan
The cornerstone for any estate plan is a will. Your will sets forth your instructions as to:
- Who receives your assets at your death.
- How those assets will be distributed.
- Who will be in charge of your assets once you are gone.
- Who will take care of your minor children in your absence.
Without a will, you have no control over what happens to your estate once you pass away. So who dictates where your belongings go? The Commonwealth of Kentucky. If you have no will, Kentucky's laws of intestate succession determine who inherits your estate. These laws also determine the amount of share an heir receives. While you may have told your spouse or children what you wanted, if you did not reduce these instructions to a formalized will, these instructions are inconsequential.
The bottom line: Make sure you have a will. Protect what you have worked for your entire life. Leave your kids a legacy that they can build upon. Speak with a Hopkinsville estate planning lawyer to help you craft a last will and testament.
What About Trusts in Estate Planning?
Trusts are a useful estate planning tool. Trusts allow the creator of the trust to both:
- Control how a certain asset is used, and
- Control who will receive the benefit of that asset.
For example, let's say you wanted to provide money for your grandchildren. You could name your children as the trustees. They would manage the assets you place in the trust for a certain period of time. You could provide stipulations as to how the trustees would use the assets for your grandchildren. Common examples for the use of trust assets are:
- Purchase of a home
- Special needs
Perhaps the most common estate planning trust is the revocable living trust. The primary purpose of a revocable trust is to avoid probate. When you create a living trust, you place assets into the trust. You are the trustee and beneficiary for your lifetime, so you control the assets just like you otherwise would. Upon your death, the assets are then distributed to the beneficiaries as you direct. Because you do not own the assets personally, there is no need to open a probate estate. Consequently, opening a trust estate can save money that you would otherwise pay to an estate planning lawyer to open probate. If you are interested in learning more about living trusts, speak with a Hopkinsville estate planning lawyer to see if a living trust is suitable for your situation.
Its Time to Create an Estate Plan
Incapacity and death can strike at any time. Take time to sit down with a Hopkinsville estate planning lawyer and form a plan that protects all that you have worked for an accomplished in your life. You owe it to your family to make your wishes clear. Appoint someone to take care of you if you become unable to manage your healthcare or finances. Name an executor to control your estate after you pass. Say where you want your assets to go. These are critical decisions that you should make.
Give us a call today at 270-569-0006 to discuss your estate plan. John Crow is an experienced estate planning lawyer in Hopkinsville and he will guide you through this process step by step.