Estate Planning

Estate Planning

Your estate is comprised of your assets and belongings. When you die, it will need to be distributed and even taxed.  It is your responsibility to plan for this. Otherwise you are leaving it up to loved ones or the state  to clean up after you.  Your estate can be planned with a will or trust.

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Probate

probateProbate is the process of proving your will in court. A will is used to define distribution of your estate after you die.  This goes through the state probate court.  It can take months and it is not private. Anyone can appear to contest it (such as debt collectors), as it is public record.  Your loved one may have to pay for representation or advisement  during this process. A will may make it easier since it offers your wishes as direction.  You can avoid probate by setting up a trust.

 

Will

willEveryone should have a Will.  If you are married, planning for kids, or have kids, you need a will.  A will is a written document that directs how to distribute your estate after you die.  It lists all of your wishes including how any dependents should be cared for, and by whom.   Maybe you want to donate some savings.  Maybe you want to give your Breaking Bad collection to your roommate. You still have to go through Probate court.  The Will at least communicates your wishes during probate court.

Revocable Trust

wagonAll assets get registered under the trust.  It is a legal entity.  For example: Your house, your savings accounts, are listed under “Some name of the Trust”.  The revocable trust can be modified at any time. When you die, the contents of the trust can be distributed quickly and privately without going through probate.  The trust documents your wishes and directions for distributing the assets.  It can also direct the care you wish for any dependents.  All affected assets must be registered using the trust name rather than the individual’s name.  Bank Accounts, Deeds, etc.

Think of a trust like a wagon holding all of your belongings. When you stumble and fall, your belongings are still traveling in the wagon.

Irrevocable Trust

armoredwagonAll assets get registered under the trust. It is a legal entity. For example: Your house, your savings accounts, are listed under “Some name of the Trust”.  The irrevocable trust can not be modified at any time. When you die, the contents of the trust can be distributed quickly and privately without going through probate. This type of trust may be used in long term care planning. The trust documents your wishes and directions for distributing the assets.  It can also direct the care you wish for any dependents.

 

Health Care Proxy

A Health Care proxy is the designated person you want to make health decisions for you in case you are unable to speak and communicate these decisions.

Power of Attorney

poaYou grant someone power of attorney so that they have the power to make decisions for you on paper.  This is very serious and should not be taken lightly.  You may want to assign someone Financial Power of Attorney.  In the event that you are incapacitated and unable to maintain your finances, this person can have access to your accounts, pay your bills, and act in your best interest.