Estate Planning for Families
Estate planning is an important consideration for all families, regardless of their income or net worth. It involves making a plan for the management and distribution of your assets after your death. If you have minor children, it is important to include provisions in your estate plan for their care and financial support. This may include creating a will or trust to specify who will be the guardian of your children and manage any assets that you leave to them. Since minor children are under the age of 18, by law they cannot make decisions about things like legal contacts and documents, nor can they make legal decisions relating to material or non-material property (real estate, bank accounts, other assets, debts, and inheritance matters.)
Here are some common estate planning documents that may be necessary if you have minor children[1]:
Will: A will is a legal document that specifies how your assets will be distributed after your death. You can use your will to name a guardian for your children and specify how their inheritance will be managed until they reach the age of majority.
Trust: A trust is a legal entity that holds and manages assets for the benefit of one or more beneficiaries. You can create a trust to manage your children's inheritance until they are old enough to manage it themselves. You can specify the terms of the trust, such as when and how the trust assets will be distributed to your children.
Durable power of attorney: A durable power of attorney is a legal document that allows you to appoint someone to manage your financial affairs if you become incapacitated. You can use a durable power of attorney to appoint someone to manage your children's inheritance if you are unable to do so.
Healthcare power of attorney: A healthcare power of attorney is a legal document that allows you to appoint someone to make healthcare decisions on your behalf if you become incapacitated. This may be necessary if you have minor children and want to ensure that their healthcare needs are met if you are unable to make decisions for them.
In addition to the above documents, other decisions that will need to be decided include:
Potential Guardians: Who will you appoint to take care of your minor children in the event you pass away?
Executor: An executor is someone whom you trust to make decisions related to property and financial assets.
It is important to consult with an attorney when creating an estate plan to ensure that your documents are properly prepared and executed. An attorney can help you understand the legal requirements for each of these documents and ensure that your estate plan meets your needs and the needs of your minor children.
An estate plan is an act of love
An estate plan is a way of taking care of your loved ones and ensuring that your assets are distributed according to your wishes after your death. It's an act of love because it allows you to provide for your family and protect them from potential legal and financial difficulties.
I my opinion, one of the most important reasons is an estate plan can help to avoid conflicts among your loved ones by clearly outlining your wishes for the distribution of your assets. This can prevent disputes and help to preserve family harmony.
An estate plan is an act of love because it allows you to provide for and protect your loved ones in the event of your death. It's an important way to ensure that your wishes are carried out and that your loved ones are taken care of.
What is a healthcare proxy?
A health care proxy (HCP) is a legal document that allows you to appoint someone to make medical decisions on your behalf if you are unable to do so. This person, known as your "health care agent," will have the authority to make decisions about your medical treatment, including decisions about life-sustaining treatment.
It's important to choose your healthcare agent carefully. This person should be someone you trust to make decisions that are in line with your values and wishes. You should also discuss your wishes with your healthcare agent and make sure they understand your preferences for medical treatment.
Your healthcare proxy will only go into effect if you become incapacitated and unable to make your own medical decisions. If you are able to make your own decisions, your healthcare agent will not have any authority[2].
When should you use a trust?
A trust is a legal arrangement in which a person (the trustor) transfers ownership of their assets to a trustee, who manages the assets for the benefit of the trust's beneficiaries. Trusts can be useful for a variety of estate planning purposes, including:
Avoiding probate:
Probate is the legal process of distributing a person's assets after their death. If you create a trust, your assets will be transferred to the trust rather than going through probate. This can save time and money and make the process of distributing your assets more private.
Minimizing taxes:
Trusts can be used to minimize estate, gift, and income taxes. For example, a bypass trust allows you to transfer assets to your spouse while still taking advantage of their estate tax exemption.
Managing assets for minors or incapacitated individuals:
If you have minor children or an incapacitated adult who is unable to manage their own financial affairs, a trust can be used to manage and distribute assets on their behalf.
Protecting assets:
A trust can be used to protect your assets from creditors, lawsuits, and other claims.
How much an estate plan will cost
The cost of an estate plan will depend on a variety of factors, including the complexity of your assets and the specific documents you need. Some common estate planning documents, such as a will or power of attorney, can be relatively inexpensive to create, while others, such as trusts, can be more costly.
An estate plan can range from a few hundred dollars to several thousand dollars, depending on the complexity of your assets and the services provided by the attorney.
It's important to shop around and get quotes from multiple attorneys or estate planning professionals to find the best price for your specific needs. We recommend working with an attorney to ensure that your estate plan is properly structured and effective.
Should I use an attorney or an online company?
It's important to have a well-drafted and properly executed estate plan in place to ensure that your wishes are carried out and your loved ones are taken care of.
There are several options for creating an estate plan, including using an attorney or an online company. Some things to consider when deciding which option is best for you include:
Cost: Online companies often offer estate planning services at a lower cost than attorneys. However, it's important to carefully consider the quality of the documents and services provided by online companies, as they may not offer the same level of expertise and personalized attention as an attorney.
Expertise: Attorneys have extensive knowledge and experience in estate planning law, and can provide advice and guidance on the best way to structure your estate plan to meet your specific needs and goals. Online companies may not have the same level of expertise and may not be able to provide the same level of personalized advice.
Customization: An attorney can tailor your estate plan to your specific needs and goals, taking into account your assets, family situation, and other factors. Online companies may offer pre-drafted documents that may not fully meet your needs.
Legal review: An attorney can review your estate plan to ensure that it is legally sound and meets all necessary requirements. Online companies may not provide this service.
While online companies may offer convenience and lower costs, the expertise and personalized attention of an attorney can be invaluable in ensuring that your estate plan is effective and meets your specific needs.
We are not estate planers and do not provide legal advice, however we believe having these documents in plan is in your best interest.
“This post is provided for informational purposes only and should not be construed sa tax and/or legal advice. Consult a tax or legal professional regarding
1,2 (https://www.investopedia.com/articles/pf/07/estate_plan_checklist.asp)