ESTATE PLANNING Q&A: 

 

 

Someone told me I should create an ‘estate plan’.  Now what?

Answer:  You should make an appointment to meet with an attorney to help you prepare personalized documents that spell out exactly how you want your things managed – your finances and health during your life and your stuff after you die.  A basic plan should include: a financial Power of Attorney, a health care Power of Attorney & Living Will, a Last Will and Testament and sometimes trusts.  Setting out what kind of care you want, who you want to make decisions if you are unable, and inheritance ensuring your wishes are honored and minimizing taxes and legal complications. Highly recommend you talk with an estate planning attorney to make sure you sign the right paperwork for the state you live in.

How soon should I create an estate plan?

Answer: As soon as you hit the ‘age of majority’ – age 18 in most states. 

 

Do I need a Power of Attorney document for my finances and my medical decisions?

Answer: ABSOLUTELY CRITICAL.  If you are an adult and you become unable to make important decisions for yourself (in an accident), someone needs to have the legal authority to make decisions for you (like gain access to accounts to pay bills, elect surgery or medication).  It may be important for you to choose some wh

 

Do I really need a Will?

Answer:  A Will is like an upon-death direction manual for your stuff. If you own anything in your name alone, you can control what happens to it all; but your direction manual needs to be written and signed correctly, and you need to pick people to be in charge of carrying out the instructions (Executor), someone to plan your funeral (funeral agent), take care of your children who are under age 18 (Guardian). 

What actually happens if I die without a will?

Answer: Anything you own in your name alone (like a car or bank account) gets ‘distributed’ according to your state’s law of intestacy, and people in that lineup can also petition to be in charge of your estate.

Standard order is to your spouse (even if you are separated), your kids (even if you think they are too young or are financially irresponsible), your parents, your siblings, nieces, nephews, 1st cousins……If you play that out quickly, you’ll probably find someone you don’t want getting your money, jewelry, car  which may not reflect your wishes and can lead to legal disputes among heirs.

Should I write my own Will – I found a website that has fill-in-the-blank forms.

Answer:  Not recommended. Sometimes a bad Will is worse than no Will at all.

If you leave a writing behind that you intended as a Will but it doesn’t meet all of the criteria to have it approved quickly (proper witnesses, notarization, etc.), someone will need to hire counsel to file much more complicated paperwork – plus notice to next of kin and heirs – that may require a court hearing to have it accepted. 

How and when can I change my will after it’s created?

 Answer: You can update your will at any time and should update whenever there is a big change in your life (marriage, birth of child, move to another state). You can draft a new Will that supercedes (takes the place of) the old one entirely, or you can sign a Codicil (minimal-page addition with a only a few changes to the original Will).  As a general rule, you should take time for review every 3-5 years.

*Our firm offers a free annual review meeting with a Senior Attorney of your plan and documents if you elected to store them in our firm vault. You should ask your attorney 

What is the difference between a Will and a Trust?

 Answer: A Will takes effect after your death and needs to go through probate if you owned things in your name alone. A trust, if created while you are alive, can help manage your assets during your lifetime and with a seamless transition to management by a new Trustee after death.

How can I minimize estate taxes?

 Answer: Strategies to minimize estate taxes include gifting during your lifetime, setting up trusts, and taking advantage of estate tax exemptions and deductions.

What are beneficiary designations? Are they important?

Answer:  Beneficiary designations specify who will receive life insurance or retirement funds (401k, annuities, IRAs). They override what’s stated in your will, making them a crucial choice from the outset and something you should review & update regularly.

Who should I choose as my executor?

Answer: Give some real thought to this decision. 

Resist the urge to make this a popularity contest. Be selective. Rather than making all 3 of your kids co-Executors, name them to serve in succession. If someone can’t or doesn’t want to serve, they can renounce the role very easily. 

Choose someone trustworthy and organized, who can take both direction and criticism, who has time (in addition to their regular job or family obligations) to do the legwork to make calls, visit banks but also who recognizes the need and value of outsourcing certain tasks (hiring an attorney, CPA, real estate broker) and who can handle dealing with impatient family members or other unruly beneficiaries.