What is estate planning?

Estate planning involves putting your affairs in order so as to maximize the benefits that your assets can provide to you during your life and to those you desire to benefit after your death.

Estate planning is a process that has three objectives in mind:

  • To insure that your assets will pass at your demise to those persons you designate in a manner which will give them the maximum benefits
  • To reduce or eliminate the tax burden on your estate
  • To provide for the passing of your assets at your demise to your chosen beneficiaries without the costs, time delays, loss of privacy, loss of control and other inconveniences attendant to the probate process

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What does an estate consist of?

An estate consists of the following assets:

  • Cash and Securities
  • Life Insurance
  • Personal Use Real Estate
  • Investment Real Estate
  • Retirement Plans
  • Personal Property/Collectibles
  • Expectancies - "Future Inheritance"

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What does a complete basic estate plan include?

A complete basic estate plan must include at least the following five documents:

  • A Living Will
  • A Power of Attorney for Healthcare
  • A Power of Attorney for Property
  • A Will
  • A Living Trust

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When should an estate plan be reviewed?

Proper estate planning can protect your health, your children and your wealth. A careful review of your estate plan is essential. Your estate plan should be reviewed not less often than every three to five years, and more frequently if there are any changes in the objects of your affection, in the extent or nature of your assets, in the persons you would entrust to act if you were disabled or upon your death, or if there are changes in the law which could have an impact upon your affairs.

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What is a Power of Attorney for Healthcare?

A Durable Power of Attorney for Healthcare is a document in which you appoint an agent to act for you on health care matters. An agent you appoint will be able to make your healthcare decisions if you are unable for any reason to make them yourself, access your medical records, dispose of your remains, act as the guardian of your person in the event you are disabled (if a guardianship is necessary), and authorize anatomical gifts if you have consented to such gifts. A Durable Power of Attorney for Healthcare remains effective even if you become disabled, and determines who has the legal authority on which doctors and hospitals can rely when medical decisions need to be made and you cannot make them yourself.

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What is a Power of Attorney for Property?

A Durable Power of Attorney for Property is a document in which you appoint an agent to act for you on financial matters. It nominates an agent to act as guardian of your financial estate if you are disabled and a guardianship is necessary. If you are unable or unavailable to deal with your financial affairs, your agent can access your bank accounts, transfer money, and act on your behalf in almost any financial matter. With proper provisions, your agent can operate or conclude your business, help with paying your bills as you age, and transfer property into your living trust.

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What is a Living Will?

A Living Will is a document that expresses your consent and legal right to refuse further medical treatment if your death is imminent except for death delaying procedures, while providing for only comfort care or pain medication.

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What is a Living Trust?

A trust is a three party arrangement. The first person, the "Grantor" or "Trustor" gives something of value to the second person, the "Trustee", to be held and administered upon the terms set by the Grantor in a written trust agreement, for the benefit of the third party, the "Beneficiary". A "Living" Trust is a trust of which you are both the Grantor and the Beneficiary, and usually you are also the Trustee.

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What benefits does a Living Trust offer?

The advantages of a Living Trust include the following:

  • Assets titled in the name of the trust are not subject to probate proceedings in the event of disability or upon your death
  • Trust assets are not subject to the control of the court system
  • Your trust is a private document, not available for the public to see
  • The assets left to your loved ones in trust may be protected from their creditors, and predators
  • There is no delay in the use of assets for the benefit of your loved ones
  • By naming successor trustees you create automatic succession of control, where successors can act upon your death or disability without any court involvement

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What is Probate?

Probate is a legal proceeding where someone is appointed to "step into your shoes" to handle or wind up your affairs.

There are two types of probate:

  • Living Probate (Guardianship)
    • Disabled Estate as a result of physical or mental incapacity;
    • Minor's Estate occurs when a person under 18 receives assets in excess of $10,000
  • Death Probate
    • Decedent's Estate
      • Personal Representative Appointed
        • Notifies known creditors of right to file claims for payment.
        • Publishes notice in newspaper for unknown creditors.
        • Inventories and appraises all assets.
        • Reports everything to the court.
        • Best Case: Court can negate or second guess whatever the Representatives does.
        • Worst Case: Need court permission for everything.
      • Delays use of funds by loved ones
      • Expensive
      • Lengthy (6 months to years)
      • Loss of Privacy

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