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Wills, Trusts & Estate Planning
Estate planning is essential to devise a plan by which your assets are distributed for the care and benefit of your beneficiaries. Proper planning may involve the creation of a will, trust, power of attorney, and advance directive for health care. The decisions you make in your planning will have significant consequences for your loved ones and beneficiaries. Examples of the important decisions to be made include: choosing a guardian for minor children; providing for the health, education, maintenance and support of loved ones; tax implications; carrying on of business interests, and choosing someone to administer your estate. Every estate plan is unique and must be tailored to the specific needs of the client. Consultation with experienced counsel and careful consideration of the implications are essential to a properly drafted estate plan. Failure to prepare an estate plan will result in an intestate estate. Intestate is the term used when a person passes away without a will. In an intestate estate, the laws of descent and distribution will determine who receives your property by default. Your wishes at that point are irrelevant. The intestacy laws may result in a distribution of your estate that does not provide for your loved ones and beneficiaries as you desire. The most common component of any estate plan is the will. A will is simply a formal document that provides for the distribution of property owned by you at the time of your death in any manner you choose. It will also govern decisions such as who will be appointed guardian for your minor children. A will may dispose of your property outright or establish a trust for the purpose you choose such as the health, support, maintenance and education of your beneficiaries. The creation of a will is a formal process requiring strict compliance with the law. For example, the will must be properly executed and witnessed or it may be invalidated. A will frequently does not address all issues of concern in a properly prepared estate plan. For example, much of your property may not be governed by the will. Such property is termed non-probate property. Examples of non-probate property include life insurance proceeds, annuities, retirement benefits, financial accounts with payable on death provisions, or any property contained in a revocable living trust. An experienced estate planner will help you identify any non-probate property and make sure it is payable as you desire. A power of attorney is another important component to any estate plan. A power of attorney will allow you to grant one or more persons the power to act on your behalf. The power may be effective immediately or upon the occurrence of a particular event. The benefit of a power of attorney is that it will allow your agent to address matters on your behalf that you may otherwise be unable to address at the time for a variety of reasons. Incapacity is a common example of why granting someone power of attorney may be beneficial. If you do not have a power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint a guardian or conservator to act on your behalf. In addition to a power of attorney, an advance health care directive, also known as a living will, should be utilized in an estate plan. An advance health care directive will allow your chosen health care proxy to make important decisions regarding your health care in the event you are unable to do so. You may also provide directions for your health care proxy so that your wishes are known ahead of time. For example, whether life sustaining treatment is to be continued under certain conditions may be addressed so that your family does not have to speculate as to what you would want. A major aspect of estate planning is proper tax planning. Proper planning will address the impact of estate taxes, gift taxes, and generation skipping taxes so that your final wishes may be carried out rather than paying the government. The applicable tax laws are complex and change frequently. Careful consideration must be given to the tax implications, and experienced counsel should be consulted. |
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