Estate planning is commonly thought of as the development of a plan that provides for the transfer of your assets at your death to people that you choose. However, estate planning is more than just a Will. Estate planning is also the development of a plan that manages your assets, financial affairs, and medical decisions for you in the event you ever become incapacitated and can't manage these issues for yourself.
The failure to have an estate plan means that the State, by default, will create a Will for you. In addition, the Probate Court will name a person to make medical decisions for you and manage your financial affairs for the rest of your life if you are unable to do so for yourself.
Over 80% of our citizens have not completed their estate plan. As a result, they are left at the mercy of the State, which will automatically take responsibility for caring for them during their lifetime and distribute their assets upon their death – quite often in a way that is inconsistent with their wishes.
Do you know when you may become ill or incapacitated? Do you know when you will die? Who will take care of you or your financial affairs in the event of these or other incidents?
Since we don't know when an accident, illness, or death may occur, it is never too early to develop your Estate Plan. The development of your estate plan should not be delayed even in the difficult economic times that we face today. Although no one ever thinks that they will become incapacitated or die tomorrow, we don’t know when that day will occur. If planning is not done, people other than those of your choosing will be making decisions about your finances and medical decisions during your lifetime. At your death your assets may go to people to whom you don’t want to bequeath assets, or your assets may end up being distributed to minor children at age 18, or being distributed to people who you do not want to receive the assets outright because they have creditors, are receiving public benefits, have marital problems, are spendthrifts, or are incapable of managing those assets because of health problems.
An Estate Plan addresses three (3) main issues:
What happens during a person’s life if the person becomes incapacitated from an accident or illness and is unable to manage their financial affairs or is unable to make medical decisions for him- or herself?
What happens to your assets upon your death? The two documents commonly used to distribute your assets are a Will and a Trust.
Who will receive assets such as IRAs, joint bank accounts, life insurance polices, and annuities upon death. These assets are generally transferred to the person named as beneficiary by the asset itself instead of through the provisions of a Will or a Trust. Thus, coordination of the distribution of all assets is essential.
A well-developed estate plan will answer the following questions:
Where do I want my money to go after my death?
How do I protect the inheritance of a beneficiary who is a minor, is disabled, is a spendthrift, or has financial or marital problems?
How can I protect myself and my family if I become disabled?
Who do I want to make medical decisions for me if I can’t make them for myself?
Do I want my life extended by life support or tube feeding if I am terminally ill or permanently unconscious with no chance of getting better?
Who will receive assets such as IRAs, joint bank accounts, life insurance polices, and annuities upon my death? These assets are generally transferred to the person named as beneficiary by the asset itself instead of through the provisions of a Will or a Trust. Thus, coordination of the distribution of all assets is essential.
How can I reduce or eliminate estate taxes?
The legal documents that can comprise an estate plan are:
Will. A Will is a document in which you state who will receive your assets upon your death. The Will also names a personal representative chosen by you to probate your estate through the courts.
Trust. A trust also provides for how your assets are to be distributed at your death. In addition, it states who you want to manage your assets if you become incapacitated and can no longer manage those assets for yourself as well. Unlike a Will, a Trust avoids probate at your death and eliminates the need for a conservatorship.
Health Care Power Of Attorney. This document allows you to name the person you want to make medical decisions for you if you can’t make medical decisions for yourself. The health care power of attorney also allows you to indicate whether you want to be kept alive by life support if you ever become terminally ill or permanently unconscious with no chance of getting better. This document also allows you to state whether you want tube feeding under those circumstances. Lastly, this document allows you to indicate whether you want to be an organ donor.
Durable Power Of Attorney. This document allows you to name a person who is responsible for managing your financial affairs and signing documents on your behalf if you are incapacitated.
As briefly described above, there are multiple legal options available to you when planning your estate. Choosing an option without guidance from an experienced professional can be confusing, overwhelming, and often frustrating. Our approach at Dennis Christensen, P.A. is simple:
We ask you the right questions to identify your wishes and goals;
We listen attentively to you as you describe your unique situation and express your wishes for the future;
We inform you of the pros and cons of each option so that you can understand the choices available to you, and
We develop a plan for you and those about whom you care.
The success of our practice is based on our ability and willingness to work closely with you throughout the entire process so that we can help you make the best informed decisions possible and to ensure that the goals and wishes that you have for you and your family become a reality when you are no longer able to make those decisions.
As an experienced estate planner, Dennis Christensen is dedicated to making your future needs and goals a reality. For a consultation with Dennis’ firm, contact our law office today.
For more information and Frequently Asked Questions (FAQs) about estate planning, click here.
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