Estate Planning Law in Auburn
Why do I need an estate plan? That is the question we often hear from clients who have assets and have not considered what should happen to those assets after they die.
It is a vitally important question to answer while you are alive and well. If you own property and want to direct what happens to your assets upon your death, you need to have an estate plan. It’s really that simple. Without one, the court will determine how your assets will be divided through the probate procedure, which is overseen by a probate court that has jurisdiction over the estate. It involves holding hearings and a court will decide how to distribute the assets to the appropriate heirs if there is no valid will.
The decision of the probate court may not be the way you would wish for your assets to be distributed, so it is best to answer those (sometimes uncomfortable) questions today.
Estate Planning is About More Than Finances
Incapacitation
It’s important to think about what will happen to you, your health, and your finances if you become incapacitated. A significant part of estate planning doesn’t even involve what happens after you die—it covers what happens if you are unable to make your wishes known.
Guardianship for Your Children
If you have minor children, set aside ample time to decide what will happen to them if you pass away. You can use your will to name a preferred guardian for your children, which can make it much easier for the court to designate a caretaker for your little ones.
Family Heirlooms
Some assets in your estate may have more nostalgic value than financial value, and it’s important to account for those in your plan. Jewelry pieces passed down through the generations, books of family photos, musical instruments, treasured family documents, and other items may mean a lot to your loved ones. By deciding what to do with them during the estate planning process, you can prevent fights over these items in the wake of your death.
Support for Special Needs Family Members
Whether you have a child with special needs or another family member you wish to financially support after your death, you will want to explore your options with an estate planning attorney. A special needs trust allows you to provide financial support through a trustee without worrying about your loved one losing access to federal and state benefits.
Distributing Assets
Let’s say you have three children and a large estate made up of investments, property, a second home, and cash on hand. Upon your death, an estate plan can provide for your children, their education, the education of their children, and distribute your assets, your property, cash and investments as you have directed.
Building Flexibility into Your Estate Plan
If circumstances change after your death, the initial terms of your plan may no longer be relevant. Authorizing someone else to make changes on your behalf adds some flexibility to your plan, ensuring that your funds are used in a way that is consistent with your initial wishes.
For example, you may allow your beneficiaries to name co-trustees or successor trustees. You don’t want your entire estate plan to fall on the shoulders of one or two people. It’s important to name alternate trustees and agents should any of these scenarios happen.
Revising Your Estate Plan
Things can change over time, so consider an estate plan something that must change with life events. Divorce, additional children, a change in values and priorities – these can all effect the planning of your estate.
Other reasons to revise your estate plan may include your company’s retirement plans may change. A change in financial needs may also come up. For example, if a substantial portion of your estate was going to the child who now owns a multimillion-dollar business—you may no longer need to give them quite as much.
Estate Planning to Distribute Assets to Charities
Sometimes, individuals would prefer to direct their assets to their favorite charity after their passing. Suppose you have a love for ecological preservation of environmentally sensitive places, or homeless animals. It can be very rewarding to help those who have provided meaning during your life. Our firm can help direct your assets without burdening your family with that task.
Additionally, we will make sure that your possessions are properly titled so there is no confusion at the end of life as to how they should be distributed. It can happen that several names are on a deed, or that one of those individuals has passed on, further confusing the issue if the estate plan is not updated.
We also find that insurance policies may not name the person you would want it to benefit. These need to be updated as life changes.
If you are have a limited liability company or partnerships, these too need to be incorporated into the planning.
The tax implications of distribution should also be taken into account, so your survivors do not get into trouble with the Internal Revenue Service.
Appointing an Executor
Once you have passed on, your property is of little value to you; however, it may be monumentally important to your survivors. We’ve seen dividing assets create in-fighting among family members who previously enjoyed a healthy relationship.
End-Of-Life Care
An estate plan should leave instructions for your end-of-life care in case you become incapacitated. Designating someone with Power of Attorney gives them the authority to name someone who will be able to make medical decisions while you are alive and cannot.
For example, there may be a dispute among your survivors about how you want to live the remainder of your life if you are in an accident. And do you want to be buried or cremated? If buried, where? These are discussions that you get to make as part of your estate plan so it is not left up to chance.
Estate Planning in the Digital Age
The goal of digital estate planning is to catalog and plan for your digital assets after your death. With more and more bank accounts, different types of intellectual property, and personal information being stored completely online, this is a crucial part of your estate plan. Failing to plan for these assets leaves them exposed and at risk of being stolen, lost, or compromised.
Considering Digital Assets
For you to start this stage of your estate planning, you need a full list of your digital assets. Any data stored on a digital device is considered a digital asset. This includes data on your phone, computers, tablets, external hard drives, and flash drives. Assets that are considered digital in nature include:
- Online social media accounts
- Email accounts
- Photographs
- Spreadsheets and financial records
- Electronic documents
- Cryptocurrency
- Conversations and emails
- Music files
- Book files
- Apps and the data they hold
- Online bank accounts
Strategies to Avoid Challenges to Your Estate Plan
Plan Early and Review Often
An estate plan that is hastily thrown together is far more likely to have weak spots than one that is carefully put together and reviewed over the course of your life. You might be tempted to put off estate planning because you don’t think you have enough assets yet, you’re not sure what your goals are, or you don’t think you are old enough. But no matter how much you have, your age, or your goals, it is never too early to plan. This gives you time to refine your goals over time, make adjustments, and solidify your estate plan. After you create your plan, make time to review it once a year to make necessary changes.
Avoid Claims of Preferential Treatment by Working Only with Paid Advisors
One way that estate plans are challenged is by claiming undue influence. If one party is favored in the estate plan and that party helped the decedent with their estate planning, the challenger might claim that the party influenced the decedent to give them more. In real life, it actually just means that the person who received more was closer to the decedent and the decedent trusted them with these issues. To avoid this issue completely, don’t involve any beneficiaries in your estate planning. Go through everything with your estate planning attorney and financial planner. This makes it much harder for any challengers to claim that you were unduly influenced.
Look into Ways to Avoid Probate
Probate can be a time-consuming and expensive process for surviving family members, and it may give those who don’t believe the will extra time to draw out the process. Consider estate planning tools that do not require your estate to go through probate. For example, a trust does not go through probate because it simply transfers to the successor trustee when you pass away. This can save your family time, money, and the emotional pain of dragging out your affairs longer than necessary.
Communicate with Loved Ones Ahead of Time
This is a careful line to walk. You don’t want people to be surprised upon your death. If they know ahead of time what to expect, they can plan their response accordingly.
Remember, none of us have any idea when the end of our lives will occur. For that reason, we strongly suggest that our younger clients have an estate plan as well, especially if they have children to provide for. An estate plan can designate the guardianship of your minor children in the event of your death and it can specify how their financial needs will be provided for when you are no longer alive.
For experienced guidance on estate planning documents, contact Haygood, Cleveland, Pierce, Thompson & Short LLP at (334) 731-7693 to schedule an initial consultation. You may also send us a message through our online contact form.
