Estate planning is a complicated process about what happens to your assets at the time of your demise. Estate planning lawyers make sure they inform their clients about the basics of estate planning regardless if they already have or not an estate plan already. In most cases, a lot of clients still don’t know or have an idea of what an estate plan is even if they already own one.
Role of Education
Education is vital to anyone interested in getting an estate plan. This takes the complicated process and breaks it down into much concise and easier to understand sections. Once you know one part, then you can proceed to the next until you have a good bearing about what the whole process is actually all about. You will then know that it is not merely a bunch of legal documents that you have to sign, but is really more of making an informed decision that will enforce your wishes, objectives, and final instructions in writing.
Purpose of Estate Planning
Estate planning is not about what happens to your assets after your death, it also about what happens to you and your property when you become mentally incapacitated. A lot of times mental disability planning is taboo and is not touched or discussed upon during the process of estate planning. However, any good lawyer will tell you that this is a mistake because we now are living longer but are not necessarily living healthy lifestyles. Since life can be unpredictable, it is more important to address the possibility of being incapacitated and should be part of planning for the future.
There are currently 4 kinds of taxes that will have a bearing on your estate:
- Estate taxes (including state estate taxes),
- Gift taxes,
- Generation skipping transfer taxes
- Income taxes
Knowing how all of these can affect your estate and the inheritance that your loved ones will receive is a vital part of the planning process.
Titling the Property
How your property is titled will ultimately dictate who will inherit after your death. Understanding the ownership of property is essential to good estate planning. The currrent owner will know who can inherit it after they are gone. For instance, in your will you leave everything equally to your siblings but all of your property is titled in joint names with your sister. In this case, all of the property will go to your sister after your death and absolutely nothing will be left to your brother.
A revocable living trust is a kind of legal document that covers three phases of your life: what happens to you and your property while you are alive and healthy, if you become mentally incapacitated, and after your death. One of the reasons why people use a revocable trust as part of their estate plan is to avoid probate. It is also a powerful tool to keep your estate planning a private family matter.
Options for Paying Beneficiaries their Inheritance
Once there is a plan in place, you can now focus on who will inherit your assets and how they will inherit after your death. There are a lot of different ways by which you can pay your beneficiaries their inheritance. You can do it outright in one lump sum or in stages or phases; it may also be in lifetime discretionary trusts etcetera.
Estate Planning Documents
These are the necessary estate planning documents you will need:
- Last Will and Testament;
- Advance Health Care Directive;
- Living Will and;
- Power of Attorney.