What is estate planning?
Estate Planning by Lydell & Lydell Attorneys at Law
What is Estate Planning?
Estate planning is simply passing property from one generation to the next- it is also known as family wealth planning. Good estate planning keeps as much of your family’s wealth together as possible, then allows you to pass those accumulated assets, intact, to your heirs. Good estate planning is vital – not only for you but for your family. There are many misconceptions and major problems with estate planning that can cost your family their fortune. Many believe that saving on federal estate taxes is the main reason for planning, but it is so much more than avoiding taxes alone.
What Does a Living Trust Do?
A living trust is essential to good estate planning. A Living Trust eliminates the need for your heirs or surviving spouse to be subjected to the agony and unnecessary cost of probate; a Living Trust provides the entity to ensure that you either pay no estate and inheritance taxes or at least minimize those onerous taxes. In addition, a Living Trust establishes the means to provide for your needs in the event that you become incompetent; it provides the entity for the support and education of your minor children; it creates the vehicle to indirectly care for a disabled child without jeopardizing his or her government benefits; and a Living Trust assures what all people want- privacy of their financial affairs.
[box]Some Common Benefits of a Living Trust
- Estate protection: Avoids the time, cost and agony of probate, provides the means to organize the estate, once the trust becomes irrevocable it shields from litigation, forced bankruptcy, and creditors.
- Beneficiaries: Allows each individual to choose his/her own beneficiaries, method of allocation, and distributions, provides for disabled children, protects minor children by appointing a guardian, protects inheritance for children of a deceased spouse, can protect inheritance from a child’s divorcing spouse.
- Personal & Family Protection: Family controlled and private, protects the individual’s assets in the event of incompetence, protects separate property, avoids living probate in the event of incapacity, can be changed at any time by you – it is revocable.
- Tax planning: Preserves both federal estate tax exemptions, avoids duplicating state estate taxes, step up in value for decedent’s and survivor’s assets in community property states.
- Settlement: No attorney or court procedures are necessary to settle the estate, protects against estatecontest, provides the means to settle the estate swiftly and reasonably, and extensive referral network for settlement assistance.[/box]
What Does the Attorney Do?
Estate Planning in most instances is very complicated and so many Attorneys who do not have extensive experience or training in Estate Planning do not perform such work because of its complexity. Estate and trust law requires knowledge of other fields of law such as corporate and insurance law. The attorney plays a key role in the estate planning process because he/she is responsible for drafting legal documents such as a will or trust agreement. The wrong phrase, even a word in the wrong place, may be the basis for a later will contest or claim for additional taxes. Yet, the attorney must be sure that the your wishes are properly and completely expressed in all legal documents. That is why it is vital that these documents be drafted by an Estate Planning Attorney who has training and experience in Estate Planning – not just an attorney who prepares Estate Planning documents as one of many areas of practice. If you attempt to accomplish your own Estate Planning with self-help books and literature or software, you are taking the risk of making mistakes which could have serious consequences.