Frequently Asked Questions About Estate Planning

Throughout their careers, many people begin to acquire assets such as retirement, life insurance, and their first homes. Money allows you to establish an estate and live comfortably as you continue to work. You provide for your family and tuck a nest egg away for your retirement. And soon, your senior years are upon you.

While you are climbing the ladder of success, don’t be fooled by all the time that is still ahead of you. Many people put off estate planning, believing they can arrange for the transfer of generational wealth sometime in the future. But there is no time like now to secure the futures of those you wish to pass assets to. You have questions about estate planning, and we have answers.

Do I Have To Be Rich To Have an ‘Estate’?

No. An estate consists of anything you own at the time of your death. This can be family heirlooms passed down to you, money in your checking and savings accounts, real estate, corporate stock, or a membership interest in a limited liability company. Your retirement plan, IRA, and life insurance benefits are part of your estate. Your clothing, books, furniture, and coin collection are also part of your estate. Not all of your estate passes through probate, but a lawyer could help you settle the disposition of your assets according to your wishes and the appropriate laws.

At What Point Do I Really Need Estate Planning?

Anyone with assets is a candidate for some estate planning. If you fail to plan for the distribution of even modest assets or treasured mementos, the government will do it for you, even to the point of keeping your assets if you have no heirs. Remember, you can leave assets to beloved friends and charities, and you can even set up a pet trust to care for your fur babies. If you are leaving a considerable estate, planning for distributions to descendants can lessen the tax burden and ensure that heirs who would not manage a large sum well receive their share responsibly.

What is Probate?

Probate is the court administration process to validate your will, settle your debts with creditors, and distribute your assets according to your final wishes memorialized in your will. Probate applies when you execute a will or if you die intestate, without one.  Often, probate requires court oversight and necessitates the filing of an Inventory and full accounting.

What Are Trusts?

Trusts can be revocable, called living trusts, that you can manage during your lifetime. You can add or delete beneficiaries and assets. Living trusts circumvent probate, so assets are administered quickly after your passing, with less expense than probate. Revocable trusts become irrevocable after your death.

Irrevocable trusts own the assets you deposit into them, and a trustee other than you controls the assets after you deposit them. They may offer a tax advantage.

I Have a Living Trust, Do I Need a Will, Too?

A will addresses assets you did not transfer to the living trust during your lifetime. A pour-over will transfer assets to your trust. Assets excluded from your living trust should have beneficiary designations, such as your life insurance policies or IRAs and any retirement accounts. Real estate that is not jointly titled can be subject to probate if it is not part of your living trust.

What Are Other Estate Planning Measures?

You can designate agents who are loved ones or others you trust to step into your shoes should you become physically or mentally incapacitated. Powers of attorney name people to pay your bills, arrange housing, sell real estate, conduct banking, and make healthcare decisions for you when you cannot.

You can also execute a living will that is a directive to your healthcare team if you are in an accident or fall into a coma and are in the end stage of life. You can authorize measures such as feeding tubes and ventilators, or you can refuse extraordinary measures.

Discuss Estate Planning With Our Dedicated Team

Estate planning is a lifetime roadmap that allows you to control the assets you amass but also to control what happens to you when you become incapacitated. No matter where you are in life or how much wealth you have, you should consult an estate planning lawyer to discuss your future. Call our office today to get started.