Start Spring Cleaning with these 5 Estate Planning Tips!
As we start preparing for the Spring by cleaning and organizing our homes, it is also a good time to organize our property and plan for our loved ones. This process is often referred to as estate planning. Estate planning is the process of preparing, managing and distributing one’s property. Quite often, people associate estate planning as a measure used exclusively by the wealthy of our society. In fact the opposite could not be more true. Although this article is written with those of our elder population in mind, the points raised in this article truly relates to us all as preparedness is the best defense to a stressful situation or crisis.
Estate Planning may be used to protect property from creditors, help with Medicaid estate planning, provide for health and medical concerns, establish guardianships, provide for family and establish a smoother estate administration. The following 5 estate planning tips are important considerations the elder client should take into account when setting up an estate plan:
- Gather Personal Belongings: Estate planning tip number one is one of the most important steps. You will begin by making a complete list of assets and then decide what you want done with your assets. Consider which estate planning tools to use, such as a Will, a Trust, Power of Attorney, Living Will and Health Care Directive. After deciding which estate planning tool you plan to use you will want to implement the plan.
- Pay Creditors and Expenses: 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.
- Distribute Estate Property To The People You Want, The Way You Want, and When You Want: A Will is a legal document in which a person expresses their objectives on how to distribute property and assets after their death.
- Reduce Estate Taxes and Fees: 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.
- Reduce Burden On Loved Ones: 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.
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.
Whether you use some or all of the tools discussed in this article 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 visit our website: www.pilelaw.com or call 610-718-6368.