This article is provided for informational purposes only and does not constitute legal advice. It is not offered as and does not constitute the establishment of an attorney client relationship. You should not act or rely on any information contained in this article without first seeking the advice of an attorney.
Estate Planning is not just for wealthy individuals, it does not matter if you have $1 to your name or billions you need to prepare so that your family is not left dealing with messy probate issues.
A recent study showed that fifty five percent of adults do not have a will. The biggest reason for this seems to be procrastination, believing that they will have time to put one together before they pass away. Estate Planning can be used to protect property from creditors, help with Medicaid, provide for health and medical concerns, establish guardianship’s, provide for family and establish a smoother estate administration.
These 5 estate planning tips are important considerations to take into account when setting up an estate plan:
Make a Complete List of Your Assets: After making a complete list of assets decide what you want done with those assets. Consider which estate planning tools to use, such as a Will, a Trust, Power of Attorney, Living Will and Health Care Directive. After making your decision, you will want to implement the plan.
Identify Debts and Creditors: You will need to identify your debts, expenses and creditors. It is important to decide when and how you want your debts to be paid. Do you have enough life insurance to cover all of your debts?
Put Together a Will: A Will is a legal document in which a person expresses their objectives on how to distribute property and assets after their death. If you don’t prepare a will your estate will most likely end up in probate.
Create a Trust: In addition to a Will, you can create a Trust. A Trust is a legal right in property, held by one party called a trustee for the benefit of another called a beneficiary. A Trust can take effect during a person’s lifetime or at the time of death. A Trust can be drafted to protect assets from unfavorable federal income, estate and gift tax consequences.
At death any part of the estate over the exemption threshold will be subject to estate tax. The exemption threshold is a certain value of the estate for which a surviving spouse does not have to pay taxes. To avoid problems with an estate having a value over the exemption threshold, a credit shelter trust can be created. A credit shelter trust is used to shelter assets held in the trust from being included in the estate of the surviving spouse for federal estate tax purposes.
Create a durable power of attorney or living will: Creating a Durable Power of Attorney allows someone you trust to manage your property during your lifetime, in case you are ever unable to do so yourself. When you establish a Medical Directive and Power of Attorney you choose someone to make health care decisions for you if you become incapacitated and cannot make medical decisions for yourself.
You can use a Living Will to provide instructions to your health care provider on whether or not to withdraw life support if you are in a vegetative state or terminally ill.
Planning for the distribution of your property, your own medical care and the care of your family and friends can reduce the burden felt by your loved ones. A good estate plan and Trust will address concerns about Medicaid, caring for a spouse, child, other relative or friend, providing for a charity and tax planning.
Whether you use some or all of the tools discussed here today it’s important to start thinking about plans for your health, loved ones, and property. The purpose of estate planning is to keep the control of your life and after life decisions in your hands. As long as you have the capacity it’s never too late or too early to make a plan.
If you have Estate Planning questions, need more information or want to speak to an Elder Law attorney call us today at 610-718-6368 or fill out our contact form