Do you really need a complete Estate Plan? Even Establishing a Power of Attorney? Is it really necessary to have an estate plan and power of attorney to protect your assets? 100% absolutely, at least, for the vast majority of Americans.
What are the benefits of preparing estate planning documents for you and your family? Why is it necessary for you to hire a legal expert who specializes in Estate Planning? Keep reading to discover the answers. Defining “Estate Plan” What is an estate plan and how does it work exactly? An Estate Plan is a set of official documents that provides legal protection for a person’s assets and clearly describes how the assets are to be distributed after they’re gone. The Principal Documents of the Estate Plan
Who needs an Estate Plan? American law applies to every American. You either fulfill the legal requirements in exchange for full protection, or you leave yourself exposed. Are you an American who wants to know the benefits of creating an estate plan? Generally speaking, an estate plan is for everyone. However, there are circumstances where getting an estate plan may not be high on your list of priorities. A person may not be ready for an estate plan if he or she currently:
Why should I get an Estate Plan? Avoid Probate Ever had a fun experience at the DMV? Imagine putting your family through something similar, only worse, as your estate is being handled. Most people employ the services of an estate planning attorney simply to avoid the nightmares of probate. You don’t need to understand what probate means to know that you don’t want your estate to end up there. The bottom line, going through probate means a judge decides how to distribute your estate, and that a huge chunk of your estate disappears in costs, taxes, and fees. It also means your loved ones may have to wait months, even years to receive their inheritance. Tax Reduction Nobody likes losing money, which is why you make changes to stop the leakage when you find out you’re losing money. There are great tax benefits to be enjoyed when your estate plan is in order and lots of estate planning techniques that can be employed to reduce income and estate taxes. Avoiding Complications Most people hire estate planning attorneys after witnessing the resultant mess occasioned by a relative passing on without a proper estate plan. By taking care of your estate, you automatically shield your loved ones from experiencing similar pain. To Protect your Beneficiaries People create estate plans for their beneficiaries for two major reasons: (a) to protect their children, and/or (b) to prevent young adult beneficiaries from making bad decisions, experiencing creditor problems, detrimental influences, and messy divorces. Each state in the United States has its own laws for the protection of minors. Without your Estate Plan in order, if something happens to you and your significant other, custody of your children will be decided by a judge interpreting the laws of your state. Do you really want to leave the decision on the raising of your precious children to a stranger interpreting laws that were set in stone decades ago? Assigning a trustee and guardian to your minor beneficiaries is part of your estate planning process. It will prevent costly (emotionally and financially) legal battles, family disagreements, and a myriad of other nightmares. Are your adult children having difficulties with life and money? Can you entrust them with your assets? If you don’t fully trust your adult children to handle their inheritance appropriately, you can make stipulations and guidelines in your estate to protect them. They will receive their inheritance under your continued guidance as your legacy endures. To Protect your Assets People are now hiring estate planning attorneys for asset planning protection, even those with existing estate plans. There are immense tax benefits and liability protections that you can enjoy when the proper entities are set up to hold your assets. It might be too late to organize a plan to safeguard your assets if you’re already the subject of a pending lawsuit. This is why you need to start by creating a good financial plan which can be added to an all-inclusive estate plan to protect your assets during your lifetime and after your death on behalf of your beneficiaries. Breaking Down Your Estate Plan
Centuries ago, people only used wills to pass on their estate to their heirs. Today, a will is only one piece of the puzzle. A revocable living trust is the next estate planning mechanism which can be combined with a will to give you full legal protection. A living trust is not just a way of avoiding probate, it offers special before and after death benefits. What is a Will? In its simplest terms, a will, or last will and testament, is a document that allows a person to assign his assets for inheritance after his death. A testator has the power to choose his heirs and determine what they receive. A will can also be used to name executors that will distribute the testator’s assets in the manner he or she deems fit. In addition, you may use a will to appoint a guardian for your child if the child is a minor. What is a Revocable Living Trust? A revocable living trust is a written agreement used to appoint a manager for your property. The fact that it is created in the lifetime of the creator is what makes it a living trust. The revocability gives you the power to dissolve or change it during your lifetime for whatever reason you decide. However, a living trust automatically becomes irrevocable upon the death of the creator. There are three parties to a trust: the creator, the trustee, and the beneficiaries. Generally, people appoint themselves as trustees to retain complete control of their assets during their lifetime. Being a trustee gives you the power to deal with your assets as you see fit- invest, sell, and do whatever you wish with your assets. How does living trust works and its difference from a will? The two legal instruments are used to pass on inheritance by giving instructions on how you wish your assets to be shared. A will can be used to declare that all your assets belong to your living trust and must be shared with probate. Your living trust is a private document that bypasses probate. In your living trust, you declare exactly how you want your assets are to be distributed. What happens if I don’t have a will or a living trust? Without either, you leave no valid and legally binding instructions for your estate. That means a probate judge will interpret your state’s laws to divide up your assets. Worst case scenario, the probate court gives your assets and estate to your state. Everything you have accumulated over your lifetime would be forfeit to the government. What are the benefits of a revocable living trust? Having a living trust means you can relax knowing that your loved ones will be fully protected when you’re gone. It also means your estate will be promptly distributed to your heirs. You can draft your trust in a way that transfers your assets to your beneficiaries upon your passing, or you can assign them to be portioned over a designated period of time in specific amounts. You can also eliminate or reduce certain federal and state taxes by including certain tax saving clauses in your draft. Who can be appointed a trustee? Any adult considered mentally competent can be named a trustee. Most people prefer to name themselves and their spouse as trustees. This allows you to remain in full control of your assets while you're alive. Your successor or co-trustee will take over if you become incapacitated and unable to manage the property. Most people name their children as their successor trustees. However, if you're not confident about the ability of your children to distribute the assets according to your instructions, you should consider naming a professional fiduciary as your successor trustee. This could be the trust department of a bank, a professional trust company or a private fiduciary. Will there be a need for additional cost or work when investments or property are added or deleted? No, there is no need to contact a lawyer for every change you make to your bequest or assets. Is it necessary for a living trust to be prepared by an attorney? Yes, to ensure that you get the protection you need. If your arm gets mangled, do you stitch yourself up and hope for the best? You could. Or you could see a medical professional. It’s the same when it comes to doing your own legal work. Don’t become another statistic horror story. Consult a professional for professional matters. Don’t fall for the temptation of using those generic or online kits that are often passed off as customized documents prepared by attorneys. Understanding Your Power of Attorney A power of attorney (POA) can be described as a legal document used to authorize another person to make legal, financial and business decisions on behalf of the maker of the instrument. The person appointed will help manage your affairs in the event that you’re unable to do so. In fact, your appointed person can pay bills on your behalf, help sell your car, renovate your home, make business decisions for you and lots more. However, if you fail to create a power of attorney, a court will have to determine your mental competence and appoint a guardian. A power of attorney gives you the power to decide who you want to manage your affairs. It also avoids unnecessary delays that come with the court process. All the states have their different forms for creating power of attorney. However, to be considered valid in most states, the document must be notarized and signed. Categories of POA Although powers of attorney are generally designed to give someone else the authority to make decisions on your behalf, they however come in different categories. Durable powers of attorney are those POAs that are applicable from their execution date. This means the recipient of the power of attorney can start managing your business once it is executed. Your competency or otherwise will not matter in this instance. While a springing power of attorney on the other hand, is one that does not go into effect after execution until the occurrence of certain events. A good example of this, is the incapacitation of the creator. The recipient of the power of attorney will not have access to your affairs until such a time when the donor becomes too incapacitated to do so. In practice, a document or letter from a physician must be obtained to kick start this particular power of attorney. You can also decide on the extent of the authority contained in the power of attorney. In some states, boxes are provided for you to check the particular type of authority you intend to give. For example, a financial power of attorney might give the recipient power to only manage financial transactions like payment of bills, and exempt them from transactions like selling your real estate. Hand In Hand The best thing to do is to create a will, living trust, and power of attorney. The living trust and will shall provide protection for your heirs and assigns after you’re gone while the power of attorney will provide protection in your lifetime. Combined, the three documents will provide all the protection you need for your assets. With a power of attorney, a last will and a living trust, you can rest easy knowing that your family is well-protected. Do it now! Why wait? Why risk it? Living Wills Unlike other types of wills, a living will is not used to assign property at death. A living will (also known as an advance directive or directive to physicians) is a document used by the maker to state his or her wishes for end-of-life medical care just in case they’re unable to make their decisions known. Its power ends with the death of the testator. A living will is usually included in your estate planning. It can provide valuable healthcare guidance for the family in the event that the testator is no longer able to pass his or her wishes across. It prevents a situation where family and healthcare professionals are forced to guess the preferred treatment options of the sick person. This could result in serious disputes which might even involve a court process. The form and execution of a living will Most states provide their own advance directives forms, through which residents can state their health care wishes in detail. For instance, you can state that you want palliative care, which includes the measures taken to decrease the pain and suffering of an invalid, while reiterating that you don’t want your healthcare givers to administer extraordinary measures such as cardiopulmonary resuscitation (CPR) in certain situations. Living wills can be revoked at the instance of the testator. The document automatically takes effect from the moment it is signed or when it is confirmed that the testator is no longer able to communicate his or her healthcare wishes. However, doctors will rather rely on personal communication for as long as they can, regardless of whether or not the living will has taken effect. Healthcare Power of Attorney Most living wills are combined with a document known as durable power of attorney (DPOA) to handle healthcare. There are states that combine the two documents as one. A DPOA is used to appoint a person to enforce the end-of-life treatment wishes contained in a medical directive or living will. The person named therein is called the “healthcare proxy”, “attorney-in-fact” or “agent” of the maker of the DPOA. Living Wills Post Death The authority contained in a living will is automatically terminated the moment the testator dies. But there is one exception and it involves a situation where the power of attorney or living will provides directions to healthcare agents on what to do about autopsy or organ donation. However, this post death authority is only for a short while since these are decisions that must be made immediately after death. This is also different from the provisions of other types of will which does not take effect or become legally binding until the testator dies. What is the investment for setting up an estate plan? The price varies depending on where you live, the size of your estate, and its complexity. Trust Attorney Nicholas Costaras with a great quote customized to your specific situation. The real question is, if it were free, would you set up your estate plan? If yes, then you know you need to get your estate plan set up right now. You know that nothing is free, and you know that you do deserve the highest quality of service at a fair price. Getting an Estate Plan Why don’t you give yourself and your family peace of mind by making sure your estate is in good hands? Don’t put it off. Now is the time to invest in an estate plan for you and your family! Curious to explore additional resources? Educate yourself and get clear on exactly what you need for your family's estate plan. Book a Free Consultation We offer free consultations! If you decide not to go with us that’s fine. No harm, no foul. Why not schedule one right now? Contact me, Estate Planning Attorney Nick Costaras, for your free consultation now. Let’s get your Estate Plan taken care of!
33 Comments
Jake Malcolms
11/14/2019 08:37:15 pm
Love the depth of this article! I appreciate the expertise you bring to Estate Planning.
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Susan Rosalina
12/3/2019 05:19:34 pm
Wow! Insightful and substantive article!
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Attorney Nick Costaras
12/3/2019 05:33:02 pm
Thank you for the comment, Susan! I'll reach out to you via email shortly.
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1/8/2020 10:22:14 am
In my opinion, it's awesome that estate planning helps your beneficiaries make good decisions rather than bad ones. I'm about to retire and want to protect my three kids. I'll have to look further into estate planning.
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2/14/2020 11:21:53 am
It's good that you point out that hiring an estate planning attorney can help you ensure that your assets go to the correct people. I want my family to be well taken care of after I die, so I'm considering hiring an estate planning attorney to help me create a will.
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3/23/2020 11:15:28 am
It's very informative to read that living wills can be revoked and can also be terminated as soon as one passes away. My grandpa is getting older and is trying to figure out his will and set up a trust. It seems like finding an estate planning lawyer in Long Beach could be best for him.
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4/6/2020 01:35:09 pm
It's helpful that you point out that an estate planning attorney can help you plan for what will happen to your wealth after you die. I want to make sure as much of my wealth as possible goes to my family after my death, so I'm considering hiring an estate planning lawyer. I'm going to look for a good lawyer that offers estate planning services in my area to hire.
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4/13/2020 02:56:26 pm
Thank you for your insightful comment. You're right that it's important to work with the right Estate Planning lawyer to get your family protected.
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4/29/2020 01:16:03 pm
It's helpful that you point out that an estate planning attorney can help you plan for what will happen to your assets after you die. I want my family to financially secure after my death, so I'm considering hiring an estate planning attorney. I'm going to look for a reputable estate planning attorney in my area to use.
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5/7/2020 02:09:06 pm
It's good that you mention that an estate planning attorney can help protect your assets in case of your death. I want to make sure that my family gets as much of my wealth as possible after I die, so I'm considering hiring an estate planning attorney. I'm going to look for a reputable estate planning attorney in my area to use.
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5/19/2020 02:07:06 pm
I loved how you mentioned that when making an estate plan, there are tax benefits. My husband and I were wanting to look into estate planning in a couple of weeks, and we wanted to know more about the benefits it could provide for us. We'll have to look into hiring an estate planning attorney to help us with the process.
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6/26/2020 09:32:36 am
I like how you said that if you know you would set up an estate plan for free, then the price shouldn't actually matter and you should get it taken care of as soon as possible. Having a plan in place for your family after you die is a little courtesy that could really help them feel some peace of mind. Plus, that way they don't end up fighting over things in a way that could end up getting messy and tearing apart your family.
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6/29/2020 01:19:26 pm
It's valuable that you point out that an estate planning attorney can help make sure your assets go to the correct people after you die. I want to make sure my family is taken care of after my death, so I'm thinking about engaging the services of an estate planning attorney. I'm going to search for a reputable estate planning attorney in my area to hire.
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7/13/2020 05:36:04 pm
My Grandfather is getting on in years and he would really like to get some help to plan for when he is going to pass and what will happen to his things after. Getting some help from a professional to plan his estate would be really useful and help ensure that it will be executed properly. I liked what you said about how he may want palliative care and can put together a living will that will be able to make his wishes known.
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7/16/2020 06:41:57 pm
I liked what you said about how a financial plan should be created to include all the assets during the lifetime and liability protections should enjoy when the proper entities can hold the assets. My dad has been thinking about getting some help for his estate so that he can be more protected and can ensure that his children can get the right assets. He would really like to get some help from a professional so that he can protect his belongings and what he will leave behind.
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8/4/2020 10:38:21 am
I like what you said about using an estate planner to help you protect your children. My sister wants to make sure that her kids make smart financial decisions throughout their lives. I'll share this information with her so that she can look into her options for professionals who can help her with this.
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8/6/2020 07:32:55 am
Pointing out the benefits of Estate Planning is like preparing a good future for your family. Thank you for sharing this article.
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8/25/2020 03:42:25 am
It is really good and helpful article. Thanks for sharing
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8/31/2020 02:57:22 pm
It's valuable that you point out that working with an estate planning attorney can help make sure that your heirs inherit more of your assets than they would otherwise. I want to make sure that my kids get most of my assets after my death, so I'm thinking about hiring an estate planning attorney soon. I'm going to search for a reputable attorney that offers estate planning services in my area to hire.
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9/15/2020 04:37:09 pm
My mom has been thinking about how she can protect us when she passes and she wants to make sure that she can be a lot safer help protect her kids. She doesn't understand the laws very good and she wants to make sure that she can get a professional to help her understand all of the laws. I liked what you said about how a judge will distribute the wealth if they go through probate because they can take better care of the estate.
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9/17/2020 06:56:40 pm
My uncle's health is already deteriorating, and he's thinking of hiring an estate litigation attorney who will be able to help him assign the beneficiaries of his estates. It's a great thing that you were able to tackle here that his family may suffer from probate, wherein the judge will decide the distribution of my uncle's assets if he fails to fix this matter beforehand. I also never knew that this may help reduce income and state taxes.
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9/28/2020 02:35:27 pm
Thanks for explaining how a person is ready for an estate plan if they have more than $10,000 in assets, own property, and have a family. I have all three of those things and I like to be prepared. Planning an estate can prepare my family in case anything were to happen to me or my wife.
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10/5/2020 10:01:02 am
As you mentioned, if you don't have an estate, then your assets will go to probate when you pass on. I didn't realize what a daunting task probate could be on the loved ones left behind. My husband and I are beginning to think it may be a good idea to get our affairs in order, in case anything were to happen to us. I will have to ask him how he feels about setting up an estate.
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10/8/2020 01:15:46 pm
I found this interesting. Thanks for taking the time to discuss this, I feel that I love to read more on this topic.
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10/13/2020 01:08:36 am
I do agree that it is best to hire an estate planner as it will protect all the beneficaries, and also help the owner organize their estate. My grandmother was diagnosed with cancer. I will encourage her to hire an estate planner.
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11/12/2020 05:51:28 am
You made a good point when you mentioned an estate planning lawyer is essential if you want to protect your beneficiaries once you have passed away. My uncle is worried about his children as he just found out that he is diagnosed with cancer and the doctor told him that he only has a few months to live. I will suggest to him hiring an estate planning lawyer who is reliable to help protect his children's rights after he passes away.
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11/24/2020 07:16:51 pm
Thanks for explaining that an estate planning attorney can help shield your loved ones from pain. My husband and his brother have always fought about who will inherit their father's house. Now that he is in poor health, I will suggest my father-in-law hire an estate planning attorney so there is less fighting.
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Natasha Leone
11/30/2020 05:12:18 am
If you are looking to hire a great probate and real estate lawyer in New York City i recommend you check out https://ledlawyers.com/
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12/17/2020 05:02:46 pm
I appreciate you mentioning that it is important to have your living trust prepared by your estate planner in order to get the protection needed. My dad is wanting to look into hiring an estate attorney for our family soon. I will recommend that he hires one that is reliable and will be trustworthy and that can provide good protection for our families matters.
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1/7/2021 12:00:14 am
I appreciate that this post shared that one of the perks of hiring an estate planning attorney is that we will be graced with tax reduction. Assuming that I own an estate, it would beneficial for me to have my taxes reduces. I will definitely look for an experienced attorney to help me plan my estates.
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2/12/2021 11:23:47 am
I want to make sure that my family doesn't have to stress out if I pass on. It makes sense that having a clear estate plan would be beneficial! I'll be sure to find a professional to help me get that set up so that I can ensure that it's done right.
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3/26/2021 01:40:07 pm
It's good to know that you should get an estate plan in order to help avoid probate. My sister needs to hire an estate planning attorney. I hope that she can find an expert that can help her find ways to prepare.
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3/29/2021 05:45:05 pm
My dad has been thinking about planning his estate in order to be more prepared. Making sure that he can get some help from a professional could allow them to be more effective. It was interesting to learn about how he can avoid probate in order to be safer.
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