What are my first steps for Estate Planning?
Is is necessary to get a plan in place to avoid difficulty in the case of an emergency or death. Here are the first steps that should be followed in order to build an effective estate plan.
First, you should find an attorney to help with your estate planning because it can be a very difficult process if you have more complicated circumstances. It may cost more money, but you will be left satisified and stress free with your estate plan. The next step is writing out your will, which will address how your assets are distributed and who is in charge of distributing those assets properly after you pass. Writing a will ensures that each individual gets the portion of your assets that you want them to receive. Without a will, assets may only be divided among your blood relatives, leaving your spouse with nothing.
What is a Trust?
A trust is a relationship in which the trustor gives the trustee the right to hold property or assets for the benefit of a third party, the beneficiary. Trusts ensure that a trustor’s assets are distributed properly according to the wishes of the trustor. Obtaining a trust will help avoid probate, taxes, and protect assets from creditors. Another advantage of getting a trust is that is allows you to provide for a beneficiary that is underage or mental disability that can hinder their ability to manage finances.
There are many different types of trusts. A living trust is a legal document that is created during an individual’s lifetime. A testamentary trust addresses how an individual’s assets are distributed after their death. A revocable trust can be altered or terminated during the lifetime of the trustor. Whereas, an irrevocable trust cannot be changed once it is established. Living trusts can be either, while testamentary trusts can only be irrevocable.
What is a Will?
A will is a legal document that addresses the distribution of your property and who will care for any minor children in the event you can no longer do it yourself. Not having a will can leave asset decisions in the hands of judges or state officials and can cause family conflict.
What is a Living Will?
A living will is a legal document that addresses what your personal choices are about end-of-life medical treatment. If you are in an unconscious state it will determine what comes next in your treatment. For example, what medications you will or will not take and whether or not you want to prolong your life in certain medical circumstances.
What is the difference between a Dependent and Independent Administrator?
A dependent administrator is often needed when there are disputes between beneficiaries or if court oversight is required. In dependent administration, the adminsitrator is offered a higher level of protection since all actions must be approved by the court. such as the selling of assets and payment of debts.
An independent administrator comes into play when the deceased specified an executor in their will or when all beneficiaries agree to an independent executor. The executor does not have to be supervised by the court in independent administration and therefore, this process is far less time consuming and costly. Approval is not needed for the selling of assets and payments of debts.
What is a Power of Attorney?
A power of attorney is a legal document that gives one person the right to act for another person. They have the power to make legal decisions on behalf of the individual in the case that they cannot make the decisions themself.
What is a Durable Power of Attorney?
A durable power of attorney controls legal matters even after the principal becomes mentally incapacitated. However, this does not give them the power to make decisions related to the principal’s health.
What is a Medical Power of Attorney?
A medical power of attorney is a legal document that selects one person to be the health care agent of another person. The medical power of attorney will ensure that the patient is being properly cared for based on their wishes and can make any health care decisions related to the patient’s medical status. A medical power of attorney is used over a living will when the patient is unable to predict what will happen.
What happens if I die without a Will?
If you die without a will, your state will determine who gets your assets and you will be the caretaker of any of your children that are still minors. This means the court will decide who takes care of your children, thinking in the best-interest of the child. Additionally, your assets will be divided among the individuals the court decides. In some cases, this means your spouse could end up with nothing. Also, without a will, you could lose out on important tax benefits.
What is Probate?
Probate is the legal process of proving a will. Probate can include proving that a will is legal and being carried out accurately, or it can occur when no will exists and a probate court must decide on how to distribute assets. The steps of going through the probate process include obtaining the death certificate, petitioning the court to become executor or administrator, identifying assets, paying debts, taxes, and other expenses, and finally, notifying beneficiaries and distributing assets.
How long does Probate take?
For small estates, probate could take only a few weeks or months. However, for large estates, the process can take years. The process can take even longer depending on whether someone files a claim to any assets noted in the will. They have the right to contest the will or file a petition with the probate court.
What is a Guardianship?
Guardianship is when is a person is granted the legal authority to care for the personal and property interests of another person. The guardian has several responsibilites for the person they are caring for. They must provide proper care, maintenance, education, and support, supply food, clothing, shelter, and necessaries, and authorize medical, surgical, dental, psychiatric, and psychological care. For the estate, the appointed guardian must protect, preserve, manage, and dispose of the estate according to law and for the best interest of the protected person.