If there is anything that can rival the tragedy of losing a loved one, it is the confusion and family strife that can occur when that loved one failed to provide a proper estate plan. Contested wills, arguments over the distribution of assets, and a host of other conflicts can emerge in the absence of a sound and enforceable legal plan. Obviously, you don’t want your eventual death to tear your family apart. To avoid that, it is important to make sure that your efforts in planning a will and estate plan don’t end up causing your family pain that makes your passing even more difficult to endure.
Planning the Will
Let’s be clear about one thing upfront: even with a living trust, you should still have a will. While many people assume that their choice should be one or the other, the simple fact is that trusts almost never encompass every single possession that you own. Most people never bother to transfer ownership of all of their property to a trust, which means that some other method for distribution needs to be in place to ensure that assets outside the trust go where you want them to go. A Last Will and Testament can take care of that problem.
More than that, however, wills are useful for things that trusts just cannot do. A will is your best option for naming a guardian to raise your children when you die, or to cancel debts that others might owe you. For these non-asset concerns, a simple will is all that is needed.
Removing Assets from Probate
For most of your assets, however, you may want to keep them out of probate. The probate process is lengthy and costly, and often leads to contention due to its public nature. With a Living Trust, you can ensure that your estate will be handled without the supervision of the courts or the prying eyes of the public. That can help to make the process less prone to family conflict, while alleviating the confusion that sometimes results from poorly-written wills or instances in which multiple wills are discovered.
The living trust serves as a vehicle into which you can transfer asset ownership, enabling those properties to avoid the probate process altogether. There are clear provisions for distributing those assets, with a named trustee charged with ensuring that the estate is managed in accordance with your expressed desired. Trusts can also provide a way to reduce your tax obligation.
A proper trust should be established to take ownership of any real estate that you own, as well as your investments and banking accounts. If established properly, you will maintain control over the trust throughout the remainder of your life, with the trustee taking on that role when you pass away. At your death, he or she will then distribute your assets in accordance with your plan.
Powers of Attorney
In addition to the establishment of a will and a trust, you should also consider the empowering documents you will need to protect yourself in the event you lose the ability to make your own decisions. Those documents include a Financial Power of Attorney, a Power of Attorney for Health Care, and release forms to ensure that your agents can access important information if you become incapacitated.
The Financial Power of Attorney should be designed to enable your chosen agent to act on your behalf in financial matters should you lose the capacity to make your own decisions. Without such a document, the court will likely appoint someone to act in that capacity if something happens to you – and that person may not be your first choice. Many experts recommend that this document be designed as a Springing Power of Attorney so that your agent only receives authorization to make decisions for you at the moment you are declared incapacitated.
An Advanced Health Care Directive is a power of attorney for health care that basically empowers another person to make medical decisions for your when you lose that ability. This directive should detail the types of treatment you are willing to receive, as well as the care you want to avoid. As with matters related to financial decisions, it is critical to have such directives included in your estate plan to avoid any court involvement in choosing your health care agent.
Finally, you need to fill out and include a HIPAA release form in your estate plan. The HIPAA provisions were created by the federal authorities to safeguard the privacy of each American’s medical information. That privacy, however, means that your loved ones will not be able to find out anything about your condition, your insurance issues, and other pertinent health care concerns. To ensure that you keep them informed, you need to put one of these release forms into effect.
Putting it All Together
With the right estate plan, you can create a more stress-free asset distribution process for your loved ones. You can also help to ensure that important financial and health decisions can continue to be made should you ever suffer an incapacitating injury or illness. When all of these elements are in place, you can rest assured that you have done all that you can to properly prepare for your estate’s future. When you die, your trust will be used to distribute any assets assigned to it, and your will’s provisions will be managed in accordance with the probate process.
If you find all of this potentially confusing, you are not alone. Estate plans are not only something that most of us really don’t want to think about; they’re also complex matters that most laypeople simply don’t have the time or inclination to master. The good news is that you don’t have to become an expert in wills, trusts, or other elements of estate planning. That’s where we come in. At Robert Kulas Attorneys at Law, our estate planning experts can provide you with the guidance and assistance you need to construct the perfect strategy for your situation. Contact us today and we’ll work with you to ensure that your eventual passing leaves as little for your family to argue about as possible.