Creating an estate plan is one of the best and most important things you can do, not only for your own peace of mind, but also for protecting your family from further angst and hardship after your passing.
During estate planning, some of life’s most intimate and critical decisions are made. Therefore, it is important to educate yourself on the elements of estate planning, in general, as well as the various regulations that apply to your circumstances.
Estate Planning FAQs
If you’re just getting started with estate planning, chances are you have a lot of questions concerning this potentially overwhelming topic. Here are answers to six of the most popular estate planning questions to help guide you.
#1 What is estate planning?
In general, estate planning ensures that your assets pass to the people you want in a way that maximizes their value, reduces, or eliminates the tax burden on your estate, and, under certain circumstances, allows your assets to pass to your selected beneficiaries without the hassle, cost, or delay of probate.
#2 If I don’t have a lot of money or other assets, do I still need an estate plan?
An estate plan is something that everyone, regardless of age, health, or asset value, should consider. While you’re still living, and long after you’ve passed away, comprehensive estate planning ensures that the right people are in place to make medical, financial, parenting, and business decisions on your behalf.
It ensures that your assets are distributed to the appropriate people and/or organizations and in the manner that you intended. A well-prepared estate plan can also protect funds from being misused, squandered, or mismanaged.
#3 What is a Power of Attorney?
A power of attorney is a legal document that permits you to name someone to make decisions on your behalf in the event that you are unable to do so yourself. It’s one of the most effective estate planning documents because it delegates your decision-making authority to someone else. This person has the legal authority to make judgments about financials matters and more. Someone you trust, such as your spouse or partner, a sibling, or an adult child may be your chosen power of attorney. This person can make many decisions on your behalf, but they can’t amend your will or make any estate decisions after you are deceased.
#4 What is the difference between a will and a trust?
Wills and trusts are comparable in multiple ways. They are both estate planning tools that can be used in tandem to construct the most comprehensive estate plan possible. The following are the primary distinctions between a will and a trust:
- Wills take effect after a person dies; although some trusts take effect immediately.
- Wills specify who receives property when someone dies and appoint a legal representative (also called an executor) to oversee the process; whereas a trust can distribute property before someone dies.
- Wills can cover anything owned solely by the person who creates the will; whereas trusts cover only the property placed in the trust.
- Wills may be public record; whereas trusts are often kept private.
Both wills and trusts have benefits and drawbacks, so talk to your lawyer about your specific situation.
#5 How frequently should I update my estate plan?
Life can come with many twists and turns. You should revise your estate plan whenever your life or your assets change significantly. The following are examples of life changes that should cause an evaluation of your estate plan:
- Purchasing or selling a residence
- Buying another major item, such as a boat or a property
- Beginning a new business or selling an existing one
- Having children or grandchildren
- Divorce or marriage
- Death of a family member who is a beneficiary of your estate
#6 Do I need to hire a lawyer to set up an estate plan?
Hiring of an experienced estate planning attorney helps in the establishment of an estate plan that appropriately aligns with your preferences. There are websites available that offer resources in estate planning. However, people are frequently disappointed to learn that online estate plans fail to hold up in court, do not accurately reflect their wishes, and/or create a costly problem for their heirs to sort through.
At Apfelbaum Law, we understand that estate planning can be an overwhelming and uncomfortable subject matter. If you have questions pertaining to wills, health directives, trust, and estate planning, or need assistance drafting any documents pertaining to estate planning, we are here to assist you. Contact us to schedule an estate planning consultation today.
