Estate Planning

Overview

Most retirement planners presume that estate planning is a rich man's foray; however, anyone who intends to acquire assets and wants them to be ably distributed at his or her death/incapacitation should understand the essentials of estate planning. In layman terms, estate planning can be defined as the generation of a set of documents and the provisioning of those documents by executing the required actions.

These documents enable you to: specify how to manage your assets after your demise, indicate the course of action, if you are unable to make decisions due to incapacitation, state that can make financial and medical decisions for you and facilitate your health, and determine if you want to be kept alive by artificial means if you lapse into coma.

How It Works

Estate planning is carried out by the execution of five significant documents including living wills, advanced medical directives, power of attorney, wills, and trusts.

The living will document is valid during situations such as accidents or unexpected health crisis that leaves you incapacitated with no hopes of reversal. You can then use this document to specify the level of medication that should be administered on you for your sustenance. In case you do not make a living will, these options will be decided by your surviving family members, which might be detrimental to you.

The Advanced Medical Directives document is an inclusive set of documents that deal with medical powers of attorney, living wills, and health care proxies. In addition to federal laws, state laws also govern the legal execution of these documents.

A medical power of attorney document allows someone to act on your behalf, usually in financial matters, to pay the mortgage, utility, or other bills that normally are due. However, the living will takes precedence over a medical power of attorney in cases of sustaining life.

At a minimum level, a will should be in place. With the help of the last will and testament, you can appoint a reliable and trusted person as the executor of your estate. The executor will administer the estate and control the assets, as per your instructions in the will. In addition to this, you can also designate custody or guardianship of your children.

Finally, a trust protects the assets from the process of probate. It also allows the handling of your assets under different tax laws.

Benefits

Estate planning empowers you to manage your assets before and after death, facilitate the effective administration of probate, and reduce taxes and increase the value of the estate.

Cost/Pricing

The expenditure to accomplish estate planning includes legal fees and court costs. It is also possible to acquire the document templates from the Internet, but it is advisable to have them reviewed for completeness and accuracy. A full break down of the cost of estate planning can be found at costhelper.com. In short, it's estimated that a lawyer to review your family's finances and accurately prepare the necessary documents can range from $1,000-$3,000.

Timing

The documents should be prepared at the earliest practical time and updated when situations warrant them. As long as you have the means to do so, you should be prepared as soon as possible.

Companies/Industries

Legal assistance is required in some cases to execute estate planning. Consult a lawyer or financial planner, based on the complexity of your situation and the requirement for legal trusts to be setup. Perhaps the best way to start researching the right legal assistance is by looking at the top law firms. Martindale ranked the most compared law firms and Greenberg Traurig, Vandervoort, Christ Fisher, and Jones Day