“When you change the way you look at things, the things you look at change.”- Dr. Wayne Dyer
No one wants to think about his or her mortality or the possibility of being unable to make decisions for oneself. This is exactly why so many families are caught off-guard and unprepared when incapacity or sudden death does strike. Do not wait. You can put something in place now and as circumstances change, you can make amendments to your Plan, which is precisely the way Estate Planning should be done.
Helping our Clients begin the process of crafting an Estate Plan is just a starting point. There is a myriad of questions that need to be answered and concerns that need to be addressed before the Plan can begin to take shape. This burden can be overwhelming for many Clients if left to their own devices. Thus, you need a guide and a guiding hand to lead you through the complexity of all the issues and contingencies that apply to your unique situation.
Before the meeting, you need to identify the critical elements of your Plan, For example:
Make a list of current assets and liabilities. This will enable us to calculate your net worth and determine whether the Estate is subject to taxes. The list should include homes and other property, such as vehicles, jewelry, artwork, and other objects of value. Other elements of the inventory include financial statements from banks, brokerage and retirement accounts; safety deposit boxes or safes; insurance policies and liabilities, such as mortgages, lines of credit, and all other debts, as well as any and all information related to a family business.
In most states, you can disinherit anyone except your spouse (unless your spouse waived that right in a marital agreement). It would help if you also designated secondary beneficiaries in the event an heir dies, or a designated charitable organization no longer exists after you pass away.
Beneficiaries can receive assets directly or through a Trust. The decision to create a Trust will likely depend on multiple factors, such as a benefactor's age, health, and the family's financial circumstances. There are numerous types of Trusts, but a common choice is a Revocable Living Trust that manages and distributes assets and avoids probate after a Client dies. If you establish a Trust, you will need to determine how long the Trust will exist, when the beneficiaries will receive the assets, and what happens if the beneficiary dies before the assets are distributed.
In many instances, a client may want and need to work with more than one professional expert on an Estate Plan. If that is the case, your Estate Planning Attorney can "quarterback" the team and ensure that all the contingencies are covered and that the documents reflect your wishes.
Some of the more common members of an Estate Planning Team and their Duties include:
Essential documents and information the team will need or should create for an Estate Plan may include:
Typically, these documents are drafted simultaneously to ensure a couple's wishes regarding life-sustaining treatment are carried out if they become terminally ill.
Once an Estate Plan is in place, you should plan to review and update every three (3) to five (5) years or whenever you experience a life-changing event, such as:
The value of an Estate Plan goes beyond the time and money it can save your loved ones once you are gone. Having an Estate Plan in place assures loved ones that they are financially secure to the best of their abilities and can serve as a valuable relationship between the Estate Planning Attorney and your family's subsequent generations.
Most people are unaware of what documents make up an Estate Plan.
In essence, several documents are typically required to handle all issues that may arise due to incapacity or death. A good Estate Plan will likely consist of the following documents:
Wills and the Probate Process. A Will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your Will must go through your state's probate process before they can be distributed to your heirs. (If you own property in other states, your family will probably face multiple probates, each according to the state's laws.)
The process varies greatly from state to state, but it can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. With rare exceptions, probate files are open to the public, and excluded heirs are encouraged to come forward and seek a share of your estate. In short, the court system, not your family, controls the probate process.
Living Trust and the Probate Process. Jointly-owned property and assets that let you name a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities) are NOT controlled by your Will and usually will transfer to the new owner or beneficiary without probate.
But there are many problems with joint ownership, and avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably insist on a guardianship until the child legally becomes an adult.
For these reasons and others, many families and professionals prefer a Revocable Living Trust. It can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your values to your family and future generations.
Unlike a Will, a Trust does not end with your death. Assets can stay in your Trust, managed by the trustee you selected, until your beneficiaries reach the age you determine they will inherit the assets in the Trust. Your Trust can continue to provide for a loved one with special needs or protect the assets from beneficiaries' creditors, spouses, and irresponsible spending.
A Living Trust is more expensive initially than a Will, but considering it can avoid court interference at incapacity and death and is private, many people believe it to be a bargain.
Finally, most people do not consider the wording they put on titles and beneficiary designations on life insurance policies or pensions, or even bank records. You may have good intentions, but an innocent error can create problems for your family with your disability and/or death. Beneficiary designations are often out-of-date or otherwise invalid. For example, naming the wrong beneficiary on your tax-deferred plan can lead to devastating tax consequences. It is much better for you to take the time to do this correctly now than for your family to pay an attorney to try to fix things later.
Wealth Planning and Wealth Management are core elements of your (and your family's) quality of life. It's an ongoing process, not a one-time event. Life circumstances such as having a child, marriage, divorce, disability, and impending death affect your financial picture.
Whether your needs are straightforward or more complex, our process begins with a personalized review of your financial and life objectives. We work together with you and your CPA, financial advisor, and insurance professional to: Identify and understand your key goals, objectives, and the wealth management issues most important to you in developing your net worth statement and assessing your current financial situation, drafting your estate and wealth management legal documents plan for life-changing events through several types of estate planning techniques discuss considerations for retaining, transferring, or sharing your wealth.
For more information, review our , or please click here to and complete the simple – and review the various ways that we can assist you and your family with your Estate Planning.
The best time to plan your estate is now.
None of us really likes to think about our mortality or the possibility of being unable to make decisions for ourselves. This is why so many families are caught off-guard and unprepared when incapacity or death strikes. Do not wait. You can put something in place now and change it later, which is precisely how Estate Planning should be done.
Knowing you have a properly prepared plan in place - one that contains your instructions and will protect your family - will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.We know you have lots of questions about Estate Planning.
At the RJ Fichera Law Firm, we are here to answer your specific questions. Contact us either by using our online form or by calling us directly at 610-768-9255 to schedule a Free Consultation.
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