Estate Planning FAQ’s
As an estate planning lawyer with years of experience, there’s a pattern of frequently asked questions from both clients, and the general public. On this page, I’m going to address some of these common questions.
Although these answers are informative and may help guide people in the right direction, it’s important to note, they’re not a substitute for actual legal advice. If you’re in need of actual legal advice regarding estate planning, or probate, feel free to call and schedule a consultation with our experienced estate attorney today. 734-386-0224
What Is An Estate?
Believe it or not, almost everybody has an estate. Simply put, your estate is comprised of everything you own including your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, and personal possessions. No matter how large or small, everyone has an estate.
With that being said, an estate plan is not just concerned with property and asset distribution; it can also be utilized for dictating health care needs throughout someone’s final days, or during illness. In short, an estate plan ensures that your wishes are clear even if you’re unable to communicate.
What Is Estate Planning?
Estate planning is the process of anticipating one’s future needs and helps with the distribution of assets after one’s passing. This allows you to minimize costs involved in transferring property to beneficiaries. Specifically, it can minimize gift, estate, and income tax. Further more, this type of planning also avoids unnecessary expenses in probate court. Furthermore, it allows you to choose an executor of your estate. This not only saves you money, it reduces the burden that the death of a loved one places on the living and simplifies administration of the estate.
More importantly, estate planning allows you to plan for a time when you may become incapacitated and unable to make decisions. It allows you to create a plan of action should you become mentally or physically incapacitated. Having a living will or durable healthcare power of attorney in place allows you to choose an individual to help make medical decisions on your behalf.
What a Power of Attorney?
Simply put, a Power of Attorney is a document that gives one individual the power of making medical/financial decisions to another individual in the event of incapacity. The two main types of power of attorney documents include:
Financial Power of Attorney – As the name suggests, this document appoints another individual with the ability of making financial decisions on someone’s behalf should they become incapacitated.
Medical Power of Attorney (MPOA) – Also called a patient advocate designation, the medical power of attorney is a document that grants someone the power of making medical decisions on someone’s behalf.
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Do I Need An Estate Plan?
If you have assets you wish to pass on to family members or someone close to you, then yes. It’s a common, unfortunate misconception that estate planning is only for wealthy individuals with substantial assets/property. These misconceptions contribute to many unnecessary issues in court over the distribution of one’s assets.
Consider these reasons why you should have an estate plan:
- Preventing your assets from ending up in the hands of the court or unintended beneficiaries
- Protecting families with young children
- Preventing heirs from overpaying in taxes
- Eliminating possible confusion and legal disputes among family members
What Is The Role Of An Estate Lawyer?
A lawyer advises clients on getting their affairs in order to prepare for the possibility of becoming unable to care for themselves or death. They also help guide people in choosing the correct options for maintaining their estates after death or incapacity. This includes writing instructions for the future handling of their property, finances, healthcare, and the future support and care of their loved ones.
Estate lawyers also can help prevent, or significantly reduce estate taxes. Furthermore, an attorney helps to ensure the management and distribution of the estate is carried out according to plan. Whether your estate plan is simple, or complex, it’s important to consult with a lawyer to protect your interests and assets should you become incapacitated or when you reach the inevitable end of life.
How Are Wills And Trusts Different?
Wills and trusts are estate planning documents. Both are legal documents in which a person expresses their wishes regarding how their property is to be handled or distributed. These documents may also detail wishes regarding health care needs and/or who will be appointed guardian of one’s children if necessary. All States require that two witnesses be present when signing a will yourself and each page must be signed by the testator (the person making/writing the will). Most people use an attorney to set up their wills and/or trusts. It’s highly recommended to have an lawyer set up your plan, including wills and trusts.
A trust has some advantages over a will. Basically, a trust may save your heirs money by avoiding probate court. Other benefits of a trust include reducing estate and gift taxes. A trust may also provide creditor protection for the inheritance you leave to your heirs…a will can’t do this. A trust can also administer assets for minor children without going to court…a will can’t do this. Finally, a trust can protect governmental benefits for a disabled person…a will cannot. In summary, it’s important to discuss any estate plan with an experienced attorney.