One of the reasons why it is important to discuss your unique situation with an attorney is because there is no one-size-fits-all estate plan that is right for everyone. This being stated, there is a basic framework that would apply to every plan in a general sense.
Let’s look at the anatomy of an estate plan so you can go forward with some foundational knowledge.
Asset Transfer Vehicle
The fact that there will be an asset transfer vehicle at the core of your estate plan is pretty self-evident. A lot of people think that you should use a will if you are not extremely wealthy, but this is not really true.
It is safe to say that most people that have enough resources to discuss estate planning with an attorney should consider the utilization of a revocable living trust as an alternative.
If you use a will to state your final wishes with regard to asset transfers, you would name an executor to act as the estate administrator. The executor would not be able to act independently.
The will would be admitted to probate, and the court would provide supervision during the estate administration process. It serves a purpose, because the validity of the will is confirmed, and creditors have a chance to come forward seeking satisfaction.
This being stated, from the perspective of the rightful heirs, it is quite a hassle. It will take nine months at minimum to run its course, and there are expenses that accumulate during probate. Privacy is lost, because anyone that is interested can access probate records.
Another drawback is the fact that you would be providing for direct, lump sum inheritances unless you add a testamentary trust. This can be a source of concern if you have someone on your inheritance list that is not good with money.
If you use a living trust, the trustee that you name in the document would be able to distribute assets outside of probate. You can include spendthrift provision to protect assets from the beneficiary’s creditors, and you could allow for measured distributions on an incremental basis.
This is one type of trust that can be a very good choice, but there are other options available. You should definitely become apprised of them so you can make fully informed decisions.
A very significant percentage of seniors become unable to make sound decisions at some point in time. Alzheimer’s induced dementia is the most common culprit, but there are other causes of dementia, and there are other types of incapacity.
Of course, people of all ages sometimes lose the ability to communicate due to injuries sustained in accidents and devastating illnesses. To account for these possibilities, you should include certain incapacity planning documents to round out your estate plan.
Advance directives for health care are part of this equation, and one of them is a living will. With this type of will, you state your preference with regard to the use of life-sustaining measures.
Other types of situations can arise when you are unable to communicate your decisions to doctors. You can add a health care proxy to empower an agent to make these decisions on your behalf if it becomes necessary.
Because of provisions contained within the Health Insurance Portability and Accountability Act (HIPAA), medical professionals cannot share information with anyone other than the patient. To give your health care agent the ability to speak freely with your doctors, you should include a HIPAA release.
To account for financial decision making, you can add a durable power of attorney for property. If you have a living trust, you can name a disability trustee.
We Are Here to Help!
Our doors are open if you would like to discuss your estate planning objectives with a licensed attorney.
We can sit down with you, gain an understanding of your situation, and make the appropriate recommendations. If you decide to move forward, we can custom craft an estate plan that is ideal for you and your family.
To set the wheels in motion, give us a call at 631-265-0599. There is also a contact form on this website you can use to send us a message, and if you reach out electronically, you will receive a prompt response.