Estate Planning Facts/Questions and Answers

Q.  What is the purpose of Estate Planning?

A.  Estate Planning is a recommended proactive action designed to protect your assets, provide for the disposition of your assets upon your death, minimize taxes that will need to be paid out of your estate and provide guidance to those closest to you as to your desired medical treatment should you become disabled, incapacitated or unconcious during your lifetime.

Q.  What types of documents are used in Estate Planning?

A.  The most basic document is a Last Will and Testament (otherwise known as a Will).  Moreover, individuals may request and/or require additional protections in the form of a Healthcare Directive (Living Will), Healthcare Proxy, Durable Power of Attorney, Springing Power of Attorney and possibly Trusts.

Q.  What is the purpose of the Will and how complicated does it need to be?

A.  A Will is simply a legal document that advises your family and friends how you wish to dispose of your estate once you have passed.  Wills assure your wishes so that those closest to you do not argue as to the distribution of your Estate.  Moreover, a Will is important to families with young children, as it can deliniate the people that you trust to raise your children and the persons responsible for the overview of your assets.  Most often Wills can be basic but would require more complexity depending on the amount of your assets.  Further, Trusts may be required depending on your individual situation.

Q.  What is a Trust?

A.  A Trust is an agreement made during your lifetime naming someone to handle the management and distribution of your assets.  You can arrange for the trustee (individual elected to manage your assets) to manage the assets during your life and/or after your death.  Trusts can also be used to minimize tax consequences, avoid probate or manage assets in the event of a disability.  For instance, Trusts may be used to protect your heirs from spending proceeds of your estate until they reach a mature age, they can be used to take assets out of the equation of the unified tax or protect family members designated for caring for a child with disabilities and allowing them to receive government benefits.

Q.  What is a Healthcare Directive (Living Will) and do I need a Healthcare Proxy or Medical Power of Attorney?

A.  Most commonly knows as a Living Will, a Healthcare Directive is a document that advises family, friends and medical providers how you wish to be treated medically should you be incapable of making those decisions.  A Healthcare Proxy is a designated individual that you provide legal authority to make medical and/or healthcare decisions should you be unable to make those decisions.  Moreover, a Medical Power of Attorney provides the Healthcare Proxy to speak with doctors, obtain HIPAA protected medical records and the power to make medical decisions.

Q.  What is a Power of Attorney?

A.  A Power of Attorney names a person who may act on your behalf in case you become unavailable to make decisions.  The document allows someone to pay your bills, permission to control your legal affairs and manage your financial affairs.

Q.  How do I know what documents I need?

A.  The importance of any of the noted documents depends entirely on the individual and their situation.  Our office is more than happy to meet with you for a free consultation to discuss which documents may be beneficial and documents that are important for your well being.

Q.  How wealthy do you need to be to benefit from Estate Planning?

A.  The creation of legal documents protecting your assets and your welfare applies to all income levels.  It is important to provide direction to others of how you wish your assets to be distributed and protect those close to you from any disagreements.

Q.  How do I begin the process of preparing my estate planning documents?

A.  In seeking information about the process and the required documents, you have taken the first important step.  However, most people delay on taking action.  Upon understanding the importance of having the correct legal documents, you should consult with a qualified attorney and seek further guidance to secure your estate.