Benjamin Franklin famously said that there are only two things that are certain in life: death and taxes. Understandably, most people tend to avoid thinking about what will happen when they pass away. After all, it’s not the most cheery topic. But, if you’ve ever wondered how to protect your assets or how to ensure your loved ones are taken care of after you’re gone, you’re in the right place. Let’s see how estate planning attorneys can help you safeguard your assets and give you the peace of mind that your loved ones are well taken care of.
What is an estate planning attorney?
Estate planning attorneys prepare legal documents that explain how your assets (including your home, car, bank accounts, and personal property) should be managed or distributed after you pass away. Estate planning attorneys can also help minimize the potential for family conflicts and disputes. They can draft a plan that clarifies your intentions and final wishes to make the transition as seamless as possible for your surviving family members.
What do estate planning attorneys do?
Estate planning attorneys frequently draft last wills, trusts, identify named beneficiaries, and create powers of attorney. They can also minimize your estate’s tax liabilities to ensure a smoother distribution of assets based on your wishes. Let’s take a deeper dive into each of these categories:
- Drafting Wills: Estate planning attorneys prepare wills that outline how your assets (personal belongings, real estate, investments, etc.) should be distributed after you pass away.
- Drafting Trusts: They can also create trusts. Trusts can be used to manage assets during your lifetime and after your passing, often to minimize taxes or control how and when assets are distributed to beneficiaries.
- Creating Powers of Attorney: Estate planning attorneys can help you appoint someone (called an agent or attorney-in-fact) to handle your financial or medical decisions if you become incapacitated and are unable to make these decisions yourself.
- Designating Beneficiaries: An estate planning attorney can help you name specific beneficiaries for life insurance policies, retirement accounts, and other assets. This allows these assets to pass directly to your named beneficiary without any court intervention.
- Addressing Tax Issues: Estate planning attorneys address tax implications related to estate planning, including potential estate taxes, gift taxes, and income taxes that may affect an estate or its beneficiaries.
- Probate and Administration: Estate planning attorneys guide executors (the person you choose to carry out the terms of your last will) through the probate process. Probate involves proving the validity of a last will and distributing assets according to its terms. Estate planning attorneys also assist with administering trusts, ensuring assets are managed and distributed according to their terms.
- Providing Legal Counsel: Estate planning attorneys offer legal advice and strategies tailored to your specific financial circumstances and family situation. This may involve planning for blended families, minor children, charitable donations, or special needs beneficiaries.
Estate planning attorneys are your key to a smooth and successful estate planning process–from drafting the documents to answering questions to assisting your beneficiaries when you’re gone.
But isn’t estate planning only for the wealthy?
Contrary to popular belief, estate planning is not just for the wealthy! Estate planning is beneficial for individuals and families of all financial backgrounds. While wealthy individuals may have more complex estates and potential tax considerations, estate planning is essential for anyone who wants to ensure their assets are managed and distributed according to their wishes after they pass away or become incapacitated.
For people with more modest estates, estate planning can still provide important benefits such as:
- Asset distribution: Ensuring your assets go to your intended beneficiaries, which can be family members, friends, or charitable organizations. If you do not set up an estate plan, your state’s laws will determine how your assets are distributed among your surviving family members upon your passing. For instance, in certain states, laws may dictate that your assets are divided equally between your current spouse and your children, even if your current spouse is not the biological parent of your children. This means your estate could potentially pass to a subsequent spouse and your children in a 50/50 split rather than just to your children.
- Minor children: Naming guardians for minor children and establishing trusts to manage their inheritances until they reach adulthood.
- Healthcare decisions: Specifying preferences for medical care and appointing someone to make healthcare decisions on your behalf if you are unable to do so.
- Avoiding probate: Simplifying the process for your heirs by avoiding or minimizing the need for probate court involvement, which can save time and money.
Estate planning is about ensuring that your wishes are respected and that your loved ones are provided for, regardless of the size of your estate. It’s a proactive approach to managing your affairs and can bring peace of mind, knowing that your wishes will be carried out effectively.
Do I need an estate planning attorney to set up an estate plan?
What’s any good lawyer’s favorite answer? It depends. Whether or not you need an estate planning attorney depends on your individual circumstances and preferences.
Here are some factors to consider when deciding if you should consult with an estate planning attorney:
- Complexity of Your Estate: If you have a straightforward financial situation with few assets and beneficiaries, you may be able to use online tools like Trust & Will or basic templates for creating a will and other documents. However, if your estate is more complex (e.g., multiple properties, investments, businesses, or blended families), an attorney can provide personalized advice and solutions to ensure your wishes are properly documented and executed.
- Legal Knowledge and Experience: Estate planning involves understanding the intersection of family law, tax law, and probate law, among other areas. An attorney who specializes in estate planning can navigate this maze and provide insights that you may otherwise overlook.
- State Laws and Requirements: Estate planning laws can vary significantly by state. An attorney can ensure that your documents comply with local laws, which is crucial for the validity and enforceability of your estate plan.
- Personalized Advice and Guidance: An estate planning attorney can provide advice tailored to your specific goals and family dynamics. They can help you consider options you may not have thought about, such as trusts, charitable giving strategies, or tax-saving opportunities.
- Updating Estate Plans: Estate planning attorneys review and update estate plans periodically or after significant life events (like marriages, divorces, births, or deaths) to ensure they remain current and consistent with your wishes and any changes in laws.
Ultimately, while some individuals with straightforward estates may be able to use DIY tools or basic legal services, consulting with an experienced estate planning attorney can be highly beneficial for ensuring your wishes are accurately documented and legally protected.
When should you start the estate planning process?
There’s no time like the present! But seriously, it’s a good idea to start thinking about setting up an estate plan as soon as you have assets or people who depend on you financially (ahem: like a new spouse, perhaps?) When you get married, you may want to ensure your spouse is provided for in the event of your passing or if you become incapacitated. This can include naming them as beneficiaries on any insurance policies, drafting a last will, granting them power of attorney, and considering joint ownership of assets. If you experience significant life events like divorce or remarriage, updating your estate plan to reflect your current wishes and beneficiaries is equally important.
The bottom line on estate planning attorneys
Estate planning attorneys can help you prepare for the unexpected and ensure that your wishes are carried out both during your lifetime and after your passing. However, setting up a DIY estate plan through online tools is just as effective, depending on your circumstances. Whether you’re safeguarding assets, outlining healthcare preferences, or planning for future generations, securing your future and protecting your loved ones begins with setting up an estate plan as early as possible. Happy planning!
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