Friday, April 4, 2014

Estate Planning: What is it?

Estate Planning.  It's listed on many attorney's website as a practice area; but do you actually know what it is?

Let's start off general.  Estate Planning is planning for your future and for your loved ones after your death.  Now to be a little more specific, estate Planning can involve:

1. Last Will and Testament.
This is a document that sets out how you want all property that you own at the time of your death to be distributed.  Do you want it to go to your brother?  Your children?  Nieces and nephews?  Best friend?  You explicitly tell the court how you want it to be distributed in this document.  You can also set out who you want to take care of your minor children, how you want to be buried and have your funeral carried out and other important items.  For more information on this, read this post.

2. Power of Attorney
This is a document that grants another person the authority to act on your behalf.  Specifically, this deals with financial matters. You can grant that person the authority to act on your behalf with banking, stocks, legal documents, etc.  You can grant this authority now or you can grant those powers upon your incapacitation.  This document can also be revoked, modified or renewed as long as you have the mental capacity to do so.  For more information on this, read this post.

3. Advanced Medical Directive
This document sets out what medical actions you want to be taken on your behalf should you become incapacitated, suffer trauma, or be unable to articulate those wishes for any other reason.  You can set out whether you want life-resuscitating action taken, whether you want a ventilator, and/or who you want to make those decisions on your behalf.  For more information on this, read this post.

4. Trusts
There are multiple types of trusts; some are revocable, others are not.  A trust is a probate-avoidance tool used in some estate plans.  It can be established now and endure through your death.  This is typically used when the parties do not want to have to go through the probate process, which can be expensive and time consuming.  Trusts hold the property of one person (trustor), for the benefit of another person (beneficiary) and is handled by another person (trustee).  The trustor and trustee can be the same person in some instances.  For example, if you want to hold property for the benefit of yourself and the upon your death, for the benefit of your children, then you are the trustor.  You and your children are the beneficiaries.  You may choose to be the trustee as well so that you are in control of your property so long as you are alive and then appoint a trustee to control the trust upon your death.  Trusts are a complex, but useful tool in some estate plans.

5. Other tools
A thorough estate plan should also look at how your property is titled and whether or not you have life insurance in place. among other things.  In many cases, you can title your property so that, upon your death, it automatically transfers to someone else without having to go through a trust or the probate process.  Life insurance can also provide some support to your family after your death as well as help pay for the funeral and burial.

The above tools are used in a full estate planning session.  However, most attorneys who practice estate planning are also willing and able to help you with simpler tasks, such as drafting a simple will.  While it is not a fun topic to discuss, it is important to think about these matters, discuss them with your close family and an attorney now so that life will be a little bit easier in the future.

If you would like more information or a consultation, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.