Estate planning is admittedly not a cheerful subject. That said, it is an important one and, like most financial subjects in today’s world, a complicated one. However, that doesn’t really answer the question of “What is Estate Planning?
At SageTrust Law Group, PLLC, we believe estate planning is a lifetime process of making the necessary legal arrangements to protect our clients, their loved ones, and their assets. We are dedicated to helping our clients organize their affairs to achieve their goals during lifetime and at death in an efficient and predictable manner while maintaining maximum flexibility and privacy.
Designing an estate plan is like building a house – you need to start with a solid foundation and then add the finishing touches. The foundation of an estate plan includes executing the basic legal documents that set forth your wishes for (i) handling medical and financial decisions in the event you become disabled or incapacitated, and (ii) distributing your assets upon your death. From time to time, you may change these basic estate planning documents as each of these documents is revocable.
The finishing touches of an estate plan may involve creating more sophisticated arrangements (many of which are irrevocable) that may (i) maximize the amount of wealth that will ultimately pass to the your family, and (ii) provide your family the benefits of protection, preservation, management, and distribution of such wealth.
Documents which address disability, incapacity and terminal illness:
- Durable General/Financial Power of Attorney
- Durable Health Care Power of Attorney
- Living Will/Advance Medical Directive
- HIPAA Authorization
- Power of Attorney for Care and Consent for Medical Treatment of Minor Child
- Revocable Trust
Documents which address death:
- Last Will and Testament
- Revocable Trust
Other estate planning essentials:
- Conduct a thorough review of the ownership and titling of all assets and change as needed to coordinate with your overall estate plan objectives.
- Conduct a thorough review of beneficiary designations for all contractual assets—such as life insurance and annuities, IRAs and qualified retirement plans, TOD/POD account designations—and change as needed to coordinate with your overall estate plan objectives.
- Complete an assessment of liquidity needs in the event of incapacity or death for each family member, and make appropriate arrangements to address the identified needs.
Durable General/Financial Power of Attorney – This document allows you to designate an Agent—often a spouse, family member or trusted advisor—to handle financial matters for you in the event you are unable to do so. This is particularly important should you become incapacitated or are otherwise unavailable, either temporarily or permanently. Without this document, it may be necessary to have a court-appointed guardian handle your financial affairs.
Durable Health Care Power of Attorney – This document allows you to designate an Agent to handle health care decisions for you in the event you are incapable of providing informed consent The document can also be drafted to give your Agent the authority to make decisions regarding the administration or withholding of life-prolonging procedures in the event you are diagnosed with a terminal condition from which there is no reasonable probability of recovery, and to enforce the terms of your Living Will/Advance Medical Directive.
Living Will/Advance Medical Directive – This document sets forth a set of directions to your attending physicians regarding the use of life-prolonging procedures, including artificially administered hydration and nutrition, in the event you are diagnosed with a terminal condition from which there is no reasonable probability of recovery. Statutory forms are available in most states to provide directions for the withholding or removal of life-prolonging procedures; however, these documents can be further customized to express your specific wishes and desires.
HIPAA Authorization – This document allows you to specify the individuals whom you would like to have access to your medical information. Without this authorization, health care providers and insurance companies are extremely cautious about sharing any medical information with your loved ones or Agents for fear of being subject to the criminal penalties, civil fines and possible imprisonment for violation of the Heath Insurance Portability and Accountability Act. HIPAA authorization language is commonly included in a Durable General/Financial Power of Attorney, Health Care Power of Attorney, and Living Will/Advance Medical Directive. This shorter HIPAA Authorization form allows your Agent to obtain the necessary information without the need to share the full content of these other documents.
Power of Attorney for Care and Consent for Medical Treatment of Minor Child – This document allows you to designate an Agent (typically a family member and/or caregiver) to handle health care decisions and provides other temporary powers with regard to the care and custody of your minor child while you are unavailable.
Last Will and Testament – This document takes effect at death. Its primary purpose is to provide for the administration and disposition of your assets upon your death. However, you can also:
- Provide for the designation of an individual(s), bank or trust company or combination thereof to serve as Personal Representative/Executor of your estate and Trustee of any ongoing trusts created under the Will.
- Provide for the designation of a guardian(s) for any minor children.
- Establish trusts, if desirable, to receive and hold assets for your beneficiaries.
- Provide for the minimization of estate, inheritance or other transfer taxes.
Revocable Trust (also known as a Living Trust) – This document is effective upon execution, while remaining completely amendable and revocable during your lifetime so long as you have capacity. Its primary purposes are to provide for the administration of your assets during your lifetime in the event of incapacity and for the administration and disposition of your assets upon your death. A Revocable Living Trust (RLT) is often combined with a simplified form of a Last Will and Testament called a “Pour-Over Will” as a strategy to avoid probate and to achieve a level of privacy not available with a stand-alone Will. As part of the RLT, you can also:
- Provide for the designation of an individual(s), bank or trust company or combination thereof as Trustee of your estate while you are alive and/or after your death.
- Establish additional trusts, as needed, to receive and hold assets for your beneficiaries.
- Provide for the minimization of estate, inheritance or other transfer taxes.
At SageTrust Law Group, PLLC, we can help you to further understand which documents are most appropriate for your situation, and serve as your “translator” to help identify and ensure that your estate planning goals and objectives are clearly expressed in your documents. Please contact us to schedule an initial consultation. Don’t Worry, We’ve Got This!
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