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Estate planning and probate matters can be complex and emotionally challenging, and many people have concerns about the legal costs involved. There’s a common misconception about how much you’re expected to pay for legal services related to wills, trusts, and probate. In fact, there’s so much misinformation out there that most people don’t realize that it’s possible to get free and low-cost legal help for these important issues.
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Planning for the future and protecting your legacy is essential, but the estate planning process can seem overwhelming. Without proper planning, your hard-earned wealth could end up in the wrong hands or be tied up in lengthy probate proceedings.
The consequences of not having an updated estate plan in place can be disastrous for your loved ones. Your family may face huge tax burdens that could have been avoided. Bitter disputes could erupt over guardianship of your children or how to divide your property.
Your life’s savings could be drained by court costs and legal fees during probate instead of supporting your family’s future. In the most unfortunate situations, your final wishes are never honored because you didn’t leave clear, legally binding instructions.
Fortunately, there’s a straightforward solution – having an experienced estate planning attorney draft a comprehensive plan tailored to your family’s needs. The wills, trusts, and probate lawyers at 1-800-Attorney have extensive experience helping clients just like you optimize their estates and minimize complications.
With their guidance, you can ensure your assets are distributed according to your exact desires by drafting a proper will. You can help your family avoid the time and costs of probate by establishing a living trust. You can designate guardians for your children and outline end-of-life preferences through advanced medical directives. You can reduce estate taxes through strategic planning strategies. And you can rest assured your loved ones are provided for by creating a legacy that transcends generations.
Don’t leave your family’s financial future to chance. Contact our qualified estate attorneys at 1-800-ATTORNEY today to begin developing a comprehensive estate plan that protects what matters most. Ensure your final wishes are properly expressed, and your legacy remains by calling now.
What is Estate Planning?
Estate planning is the process of anticipating and arranging for the distribution of your estate—which includes all of your property, assets, and belongings—during your lifetime and upon your death.
It involves making critical decisions about how your real estate, investments, business interests, personal possessions, and other valuables will be managed, preserved, and distributed. A full estate plan involves more than just a will. It also uses other important legal documents like trusts, powers of attorney, and healthcare directives.
Defining Your Legacy
Effective estate planning allows you to define the legacy you want to leave behind. Whether your goals are providing financial security for your spouse and children, donating to cherished causes and organizations, ensuring sufficient funds for grandchildren’s education, or a combination of these and other priorities, a customized estate plan is how you dictate your wishes.
According to a Gallup poll, only 46% of Americans have created a will outlining how they want their assets distributed after death. And for those who do have a will, over 60% haven’t updated it in at least 5 years or more.
It gives you control over who receives your assets when they receive them, and under what terms and conditions. Estate planning is your opportunity to essentially write the next chapter for how your life’s efforts will be perpetuated.
Protecting Your Assets
An equally critical function of estate planning is protecting your assets from unnecessary depletion over your lifetime and after you’re gone. This includes legal strategies to minimize potential estate taxes that could significantly diminish what you leave behind. Estate plans also include provisions for protecting your assets from being taken by creditors if you were to get sued.
The proper use of trusts, for example, can safeguard your wealth and real estate holdings from such claims against your estate. Overall, estate planning is how you protect your possessions from being unjustly seized or excessively taxed.
Why Estate Planning is Critical
While often overlooked or put off until it’s too late, estate planning is one of the most important things you can do for yourself and your loved ones. Without a proper estate plan in place, your assets, family, and final wishes are left unprotected and vulnerable to potentially disastrous consequences.
Here are just a few critical reasons why having a comprehensive, legally valid estate plan is important:
Avoiding Probate
Probate is the legal process that governs the distribution of assets from a deceased person’s estate. The probate court gets involved in overseeing your finances and making sure your outstanding debts get paid off. It is a process that is very complicated, costly, and takes a long time. It can keep your assets tied up for years.
A good estate plan using things like revocable living trusts can help your heirs avoid probate. This allows them to get your inheritance more easily and with lower costs.
Minimizing Estate Taxes
The federal government imposes a tax of up to 40% on estates valued over $12.06 million for an individual or $24.12 million for a married couple (as of 2022). Many states also levy their own estate or inheritance taxes on top of this. Estate planning using advanced tax-saving strategies such as giving gifts, setting up irrevocable trusts, making charitable donations, and holding real estate in qualified personal residence trusts can all help minimize your estate tax burden.
Caring for Your Family’s Future
One of the most meaningful aspects of estate planning is making provisions to financially care for and protect your loved ones according to your wishes after you are gone. Establishing trusts can ensure assets are properly managed and disbursed to your children or other beneficiaries without the risk of being squandered.
You can designate legal guardians to care for your minor children. Include specific instructions for end-of-life preferences through living wills and medical directives. Without an estate plan, your family’s future financial needs and your own healthcare wishes could be decided by others or the courts.
Consequences of Not Having an Estate Plan
Not having a family lawyer set you up with a proper estate plan can badly hurt your family emotionally and financially. If you die without an updated will, trust, or other estate planning documents, your family’s financial future is uncertain and unsafe. Even though it can cause conflict, stress, and loss of assets, a shocking 68% of Americans don’t even have a basic will saying how they want their decedent’s assets handled after they die.
Here are some serious risks your heirs face if you pass away intestate (without a will or estate plan):
Family Disputes Over Assets
Without the legal guidance and clarity that a properly structured estate plan provides, nasty family disputes can erupt over who gets what from your estate. Bitter feuds and permanent rifts can develop as loved ones argue over the distribution of your money, real estate, investments, business interests, personal possessions, and other assets you’ve accumulated over your lifetime.
With no will or trust in place expressing your specific wishes, the divvying up of your estate often gets decided through lengthy probate court battles that can fracture family unity.
Children’s Futures Unprotected
If you have minor children, not having an estate plan in place could leave their futures unprotected and futures uncertain. With no will nominating legal guardians for your kids, the decision of who raises them may ultimately be determined by the courts instead of your parental wishes.
Your children could also be left without financial security and resources for their education if you haven’t created trusts or other accounts to support their needs over the long term after you’re gone.
Life’s Savings Depleted
For many Americans, the assets they’ve worked so hard to build over their lifetime represent the bulk of their family’s wealth and security. Failing to implement an estate plan often leads to these savings and other valuable assets being severely diminished by taxes, debts, probate costs, and other expenses that could have been avoided or minimized.
The money and things you want to leave to your family might shrink a lot after probate court fees, debts owed, and other expenses take their share.
Having professional estate planning protects your loved ones from these devastating consequences. Make a plan so your wishes for your assets, business interests, trusts, and more get properly carried out.
Wills and Testaments
While estate planning utilizes many legal tools like trusts and powers of attorney, the most basic and common instrument is a last will and testament. A will serves as the legal backbone expressing your wishes for how your property and assets should be distributed after your death.
What is a Will?
A will is a legally-binding document that allows you to name beneficiaries to receive your assets and possessions according to your stated desires. It designates people or institutions to manage your estate and carry out your final instructions, including an executor to oversee the distribution process.
A will also allows you to name legal guardians for any minor children. While a will does go through the probate process, having one in place helps streamline estate administration and prevents assets from being allocated by default state laws.
Ensuring Your Final Wishes
A key purpose of a will is to formally write down how you want things handled and your assets given away after you die. This ensures that your true final wishes are followed. In a will, you can state who should get specific items like property, real estate, business succession, or investments. You can also give instructions about your funeral or memorial service.
A will allows you to name a healthcare surrogate to make medical decisions for your end-of-life care. You can choose a managing partner to have financial power over the entire process of distributing your assets according to your wishes. Without a will, the trust administration process of handling your assets may not follow your exact plans for your money and property after you’re gone.
Designating Beneficiaries
In addition to naming an executor to administer your estate, one of the most vital components of a will is designating exactly who your beneficiaries are. This allows you to choose the specific people, organizations, trusts, or other entities you want to inherit your assets and under what terms or conditions.
Many people use their wills to leave gifts or earmark certain possessions to particular loved ones. Others designate charities, institutions, or causes to receive parts of their estate. Without a valid will, your accumulated wealth could get allocated much differently than you would want.
Trusts
While a will serves as the foundational estate planning document, trusts are equally vital tools that offer enhanced control, asset protection, and tax minimization strategies. A trust is a fiduciary relationship in which you (the trustor) give a third party (the trustee) the right to hold and manage assets for the benefit of your designated beneficiaries. Trusts can provide a level of oversight, conditions, and safeguards that allow you to dictate exactly how and when your assets get distributed even after you’re gone.
Revocable Living Trusts
A revocable living trust is one of the most commonly used estate planning instruments. With a revocable trust, you maintain complete control over the assets and property within the trust during your lifetime. You can change, modify, or terminate the trust at any time, as well as remove or add assets as needed.
The primary benefits are avoiding probate upon your death and providing an extra level of automatic asset management if you become mentally incapacitated. Upon death, the trust assets get distributed according to your wishes without probate court intervention.
Asset Protection Trusts
Asset protection trusts are designed to shield your wealth and property from potential creditors, lawsuits, taxes, or other threats to your estate. These irrevocable trusts transfer ownership of certain assets out of your personal name and into the trust, protecting them from creditor claims while you’re alive. The assets within the trust are similarly insulated from estate taxes after you pass away. Various types like domestic asset protection trusts and foreign asset protection trusts offer differing provisions.
Special Needs Trusts
For families with special needs children or relatives, a special needs trust allows you to leave assets to support the beneficiary while still protecting their continued eligibility for government aid programs like Medicaid or Supplemental Security Income (SSI).
The funds get held in the trust and can be used by the trustee for the beneficiary’s supplemental care, education, therapy, housing, and other expenses not covered by need-based assistance programs. These trusts preserve financial security while not disrupting vital government benefits.
The Probate Process
Probate is the legal process of managing and distributing a deceased person’s estate according to their will, if one exists, or state intestate laws if not. The probate court oversees payment of any outstanding debts and taxes, identification and appraised valuation of all assets, and eventually the transfer of remaining assets to designated heirs and beneficiaries.
The deceased’s personal representative (executor) is responsible for initiating and carrying out the probate process.
Avoiding Probate with Trusts
One of the key benefits of creating a revocable living trust as part of your estate plan is that it allows your assets to be distributed outside of probate after you die.
Any property, financial accounts, investment holdings, or other valuables properly re-titled in the name of the trust avoid probate altogether. This can save your heirs a significant amount of time, hassle, and money compared to assets that must go through the probate process.
Probate Costs and Timeframes
Probate is notorious for being a lengthy and expensive process that most families prefer to avoid if possible. While costs can vary considerably between states and specific situations, probate fees and expenses can easily eat up 3-8% or more of a total estate’s value. Between court costs, appraiser fees, legal bills, executor payments, and other expenses, the costs quickly accumulate.
Timeframes also tend to drag out between 9-24 months on average for even a relatively straightforward probate proceeding. Complex or contested cases can take years to finally resolve.
Advance Medical Directives
As part of a comprehensive estate plan, it’s critical to have legally valid instructions expressing your wishes for medical care and end-of-life treatment.
Advance medical directives are the key estate planning documents that allow you to make these important healthcare decisions in advance before you are incapacitated or unable to communicate your preferences yourself. They provide invaluable guidance and legal authority for your loved ones and medical providers.
Living Wills
A living will is a written statement detailing your desires regarding life-prolonging medical treatments and interventions you want to receive or have withheld if you become terminally ill, permanently unconscious, or unable to make your own decisions.
It specifies your wishes on the use of mechanisms like mechanical ventilation, tube feeding, dialysis, and resuscitation efforts in end-of-life situations. A living will ensures your personal values and principles regarding quality vs. length of life are honored.
Durable Power of Attorney for Healthcare
A durable power of attorney (DPOA) for healthcare allows you to officially designate someone you trust as your healthcare proxy or agent to make medical decisions on your behalf if you become incapacitated. This person has legal authority to oversee your medical care and treatment based on your previously stated wishes or their best judgment of your preferences. The DPOA prevents hospitals or care facilities from simply going against your desires by placing decision-making into the hands of your appointed healthcare surrogate.
Do Not Resuscitate Orders
As part of your advance directives, you can elect to put official Do Not Resuscitate (DNR) orders in place with your doctors and healthcare providers. A DNR legally prohibits medical professionals from performing CPR or other life-resuscitating measures like intubation, advanced airway intervention, medication administration, or defibrillation.
This allows you to prevent traumatic resuscitation attempts that may violate your end-of-life values and preferences when death is imminent or irreversible.
Guardianship of Children
For parents of minor children, one of the most important aspects of estate planning is designating legal guardians to care for your kids in the event something happens to you and your spouse.
Failing to appoint guardians could result in lengthy court battles between relatives over who gets custody, or even your children being placed into the foster care system against your wishes.
Naming Legal Guardians
When you create a valid will as part of your estate plan, you can officially name legal guardians for your children. This allows you to choose the specific person or persons you want to take over physical custody and care for your kids’ everyday needs like housing, education, healthcare, and more.
You can name different guardians for different circumstances, like if one parent survives or if both pass away. Guardians also obtain legal authority to manage any assets, inheritance, or trusts you leave for the financial benefit of your children.
Establishing Children’s Trusts
In addition to naming guardians, your estate plan should establish one or more trust funds to protect and responsibly manage any money, property, or other assets you want your children to inherit over time.
A qualified trustee distributes funds according to your outlined instructions and safeguards the assets from being squandered or claimed by creditors. Children’s trusts preserve your wealth to be used for their care, education, housing, and other expenses as determined by the trust terms you create.
Providing for Education
A key aspect of an estate plan involving minor children is making provisions for their future educational needs and costs.
This could include establishing an educational trust to pay for college tuition and expenses, setting aside investment accounts like for school savings, earmarking certain assets for use to fund tutoring or private schooling before college, and more. With foresight, your estate plan can comprehensively provide the resources to support your children’s educational goals.
Frequently Asked Questions
What happens if I become incapacitated without an estate plan?
Lacking an updated estate plan with powers of attorney and advance medical directives puts you at significant risk if you become mentally incapacitated due to illness, injury, or old age. Without designated agents appointed to handle your financial affairs and make healthcare decisions on your behalf, the court may need to establish a conservatorship or guardianship. This is a complex legal process where a judge appoints a third-party guardian or conservator to essentially take control of your assets and personal care—instead of those decisions being made by people you choose and trust.
How does probate work if there is no will?
When someone dies intestate, meaning without a valid will in place, their assets and property get distributed according to the intestacy laws of the state they resided in. These default statutes dictate what happens with the decedent’s possessions and how heirs inherit based on their legal relation to the deceased. In many cases, this means assets go first to a surviving spouse, then to children and grandchildren, followed by parents, siblings, and so on. Having no will essentially allows the state to decide how your estate gets allocated instead of your own expressed wishes.
What’s the difference between a will and a trust?
While both are important estate planning tools, there are key differences between wills and trusts. A will is a legally-binding document that specifies how assets get distributed after death and appoints executors to carry out your wishes. A trust, on the other hand, is an actual legal entity that can own and control property during your lifetime and afterward. Assets get retitled into the trust’s ownership, avoiding probate while allowing you or your named trustee to manage and distribute them according to your instructions.
Can I use a revocable trust to avoid estate taxes?
Revocable living trusts primarily help avoid probate and allow incapacity planning, but they do not provide any special estate tax advantages on their own. All property and assets within a revocable trust are still considered part of your taxable estate. To mitigate estate taxes, you need other estate planning strategies like gifting assets to an irrevocable trust, making charitable donations, setting up qualified personal residence trusts, or taking other measures that legally remove assets from your taxable estate.
I have a blended family, how can an estate plan protect everyone?
For blended families with children from multiple marriages, tailor-made estate planning documents are critical to protecting everyone’s interests and avoiding conflicts. For instance, a will or trust could ensure assets get divided in the specific way you intend between your current spouse, your children from a prior marriage, stepchildren, and so on. You may decide to leave certain assets in a family trust to provide for your spouse during their lifetime, with the remainder getting inherited by your children upon the spouse’s passing. Careful planning prevents unintended disinheritance.
Can you over-fund or contribute too much to a trust?
Both revocable and irrevocable trusts can essentially be over-funded in a sense by transferring in too many assets at one time beyond what is needed to accomplish your specific estate planning goals. This can create tax inefficiencies or other complexities that outweigh the benefits of having the trust in the first place. An experienced estate attorney can advise on optimal funding strategies to productively use trusts while avoiding unnecessarily burdening yourself or your heirs.
What estate planning considerations involve business interests?
If you are a business owner, your estate plan should outline a clear succession plan to facilitate the company’s transition in leadership and ownership per your wishes. This may involve transferring your business interest into a trust, selling the business while maximizing tax advantages, or taking other measures to ensure the company is in the right hands rather than getting divided haphazardly. Buy-sell agreements and entity restructuring also come into play when incorporating business interests into your estate.
Contact a Wills, Trust, and Probate Lawyer
Protect your legacy and your loved ones’ future with a customized estate plan. Our network of wills, trusts, and probate attorneys provides comprehensive estate planning services tailored to your unique needs. From drafting wills and establishing trusts to guiding you through probate and minimizing estate taxes, our experienced lawyers ensure your final wishes are properly expressed.
Don’t leave your family’s inheritance to chance — contact us today to create an estate plan that preserves your assets and provides for those you care about most. Call 1-800-ATTORNEY (1-800-288-6763) now to get started with a reputable local estate planning attorney.
