What is Estate Planning?
It is the process of determining how your estate will be distributed. The most basic estate planning will involve a will distributing property to beneficiaries. It is also recommended that everyone have a Medical Power of Attorney. Some people will want to create trusts and other devices to protect their property from tax consequences, among other reasons.
What will happen if I don’t have a will?
Without a will, your estate will pass through the laws of intestacy. This means that all of your personal and real property will pass to your heirs according to statutory rules. Your desires in life to have your property pass to your children, spouse, or others, may not be provided for in the state statutes. If you don’t have a will, distribution of your estate will probably take longer and cost more in legal fees.
Avoiding Probate
There are circumstances in which the probate process can be avoided altogether.
A very common way to avoid probate is through the establishment of a living trust. This will allow you to transfer to the trust substantially all of your assets in your own lifetime. Living trusts are governed by their own provisions and they need not end immediately at your death. Therefore, if the trust is the titleholder to your property, there is no need to go through probate to re-title those assets out of your name. Instead, the successor trustee merely distributes the trust assets to the beneficiaries that you have specified in the trust document.
Life insurance, pension plans, and retirement accounts are payable directly to a named beneficiary, and therefore are neither governed by the Will nor require probate.
Property owned jointly with survivorship rights passes automatically to the survivor, and is not subject to the Will or probate proceedings. Probate can be simple and fast when a valid will is involved.
Power of Attorney
A Medical Power of Attorney can be a vital document in allowing others to make medical decisions for you, according to your wishes, in the event that you are unable to make those decisions for yourself. A Financial Power of Attorney operates in the same way, but pertains to financial affairs that may need attention at a time when you are mentally or physically unable to attend to.
Proper planning can make the difficult circumstances surrounding the death of a loved one easier on those closest to them. Contact an attorney to help you begin your own estate planning.