What is Involved in the Estate Planning?
Estate planning covers many different categories. Here are some of the most common types of estate planning and how you can benefit from them:
Last Will and Testaments: This is the legal document that declares a decedent’s intentions for who should manage his or her estate after death. It will also make a determination of who receives the various assets. To create a will and testament, many factors are taken into consideration. For instance, any person of age or of “sound mind” can prepare a will with an attorney by their side. A will must follow specific guidelines, of course. It must be signed and dated by the testator as well as the possibility of a witness. This person who writes the will must also identify that he or she is the maker and the guidelines must be explicitly followed.
Trusts: Trusts are used for aiding in minimizing estate taxes and allowing trustees to hold assets on behalf of beneficiaries. They can be arranged in a variety of ways, such as marital trusts (designed to provide benefits to a surviving spouse), bypass trusts (also known as a credit shelter trust that bypasses the surviving spouse’s estate), testamentary trusts (outlined in a will and created through the will after the death), irrevocable life insurance trust (designed to exclude life insurance proceeds from the deceased’s taxable estate), charitable lead trusts (allowing certain benefits to going to a charity and the remainder to your beneficiaries), charitable remainder trusts (allowing you to receive an income stream for a defined period of time), generation-skipping trusts (permitting trust assets to be distributed to grandchildren or later generations without incurring either a generation-skipping tax or estate taxes), qualified terminable interest property trusts (used to provide income for a surviving spouse), and grantor retained annuity trusts (designed to shift future appreciation on quickly appreciating assets to the next generation). All of these trusts are unique in their own ways and can help people differently.
You achieve great control of your wealth when you specify the terms of a trust precisely, controlling when and to whom distributions can be made. A good trust can also assist you in protecting your estate from creditors and beneficiaries who you do not want to be involved. Furthermore, it may allow assets to pass outside of probate and remain private in nature. With the right attorney, anything is possible in the realm of trusts.
Durable Power of Attorneys: This document allows you to enable an elderly parent or disabled individual to appoint an “agent” who will ultimately handle specific health, legal and financial responsibilities. These legal documents should be prepared long before someone starts to have trouble handling certain aspects of life, which is why it is important for an attorney to explain the process to you. These special documents can be written so that the transfer of responsibilities occurs immediately, or it can be written so it goes into effect when the elderly person becomes incapacitated.
You may wonder exactly why they are beneficial to the parent involved. This is because a person may not be able to make decisions for themselves, which means that someone else will have to do it for them. Without the durable power of attorney, a family member will not be the one making these decisions. If the parent wanted their child to make these decisions for them, then their wishes would never be fulfilled without this document. These important documents do not mean that you are incapable of taking care of yourself. Instead, they are a step toward a better future.
Health Care Directive: This is a written document that informs others of your wishes in regards to your general health care. This agent can then make decisions for you as long as you are 18 and older and incapacitated from making the decisions yourself. Some people believe that having a health care directive isn’t for them, but then they will have to live with the fact that somebody else could be in charge of major health decisions. This document makes it easier for wishes to be followed. An attorney can help with the general legal requirements regarding these documents and what they mean to you and your health.
Business Succession Planning: If you are planning on retirement for the future, business succession planning may be best for you. Plans to hand over the business may not be a reality to you now, but they certainly will be later. How can an attorney help with the process? They will be able to help you pick a good successor, considering many factors to do with your life. We will help you arrive at a decision by choosing someone with various strengths that must be evaluated to come to the best conclusion since it is such a huge decision weighing on your future. If you prefer the thought of your business continuing on even after you are gone and cannot take care of it, then you may want to give us a call to speak directly about a business succession plan.