Frequently Asked Questions about Wills and Estate Plans
What is a Will?
A Will is a legal document which determines what will happen to some or all of your real and personal property after your death. However, the disposition of some types of property may not be governed by your Will. For example, some property that you hold jointly with someone else (such as a joint bank account) will pass automatically to the surviving joint owner at your death. Life insurance policies and retirement plans will be distributed at your death in accordance with your beneficiary designations. Your estate plan should take these ownership concerns into account so that it represents a coordinated strategy to reach your chosen goals. Your attorney can best advise you on these complex matters.
Do I need a Will?
Everyone should have a Will. You may also benefit from other forms of estate planning, such as having a Trust, Power of Attorney or Living Will. You can only properly decide your estate plan after consulting with an attorney who can provide you advice on these matters.
Why is a Will and estate plan important?
Without a Will the government decides who gets your assets when you die – not you. Moreover, you can pay up to almost half of the value of your estate to the government in estate taxes. With a Will and proper estate planning, you decide who receives your assets, and you can reduce your estate taxes dramatically, if not offset them all together. Preparing your estate plan now will assist your family members in probating your estate and prevent unnecessary, expensive litigation in the future. In addition, it allows your family and medical providers to know exactly what type of treatment you want, should you become incapacitated.
What if I die without a Will?
If you die without a Will, your estate will be administered in accordance with state law. This law will determine who has the right to act as the administrator of your estate, the guardians of your children, what procedures must be followed, and who will be the beneficiaries of your estate. This will most likely mean the administration will be more difficult, costly, and may result in your estate being distributed contrary to your wishes. If minor children are involved, the courts may administer their assets for years to come. Any opportunity to save costs and taxes will be lost.
What is estate planning?
Proper estate planning involves much more than Wills. Estate planning includes planning for the possibilities of disability, retirement, illness and death. Such planning relates to wealth accumulation, pensions, insurance (life, disability, and protection of your assets from liability), Wills, Living Wills, Powers of Attorney and numerous other estate concerns. It also requires proper allocation of your assets to take advantage of all estate tax saving strategies available to you. Asset preservation is the key to any successful estate plan.
Power of Attorney
A Power of Attorney is a legal document in which a person appoints another to act in his or her place with respect to his or her financial affairs. The power to act may be limited to specific matters or circumstances or may be so general that the agent may take any action that the principal could take without a court’s intervention.
In estate planning, Powers of Attorney may be used to appoint an agent to act when a person becomes disabled and unable to make decisions on his or her own behalf. Without this authority it may be impossible to manage your assets if you become disabled. Alternatively, Powers of Attorney may be effective at all times or “Durable” enabling the authorized party to make decisions for the other party regardless of the disability.
Living Wills/Health Care Directives
A specialized medical Power of Attorney or Health Care Directive is required to appoint someone to make medical decisions on your behalf if you become unable to make decisions for yourself. You may simply choose to appoint an agent or you may also provide directions to the agent as to how the agent should act. The term “Living Will” or Health Care Directive is often associated with decisions to remove life support systems from terminally ill patients. However, they may also be used to allow the agent to make medical decisions on your behalf which do not involve life and death. Living Wills can help assure that your intentions are carried out. This can make it much easier on your survivors both emotionally and financially.
Changing your Will
The birth of a child or a divorce may automatically change the legal effect of a Will without your knowledge. Even if the legal effect were unchanged, you may want to plan your estate differently under new circumstances. It is important to review your Will and other documents as circumstances change (including changes in your wealth and changes relating to your beneficiaries or fiduciaries). You may also want to take into account any gifts that you have made or inheritances you have received since your last Will was written to avoid duplication to the detriment of other beneficiaries. You should review your Will and other estate planning documents with your attorney on a periodic basis.
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The materials included in this website are for general informational purposes only and do not constitute legal advice. Information contained herein is not intended to create and does not constitute an attorney-client relationship. You should seek advise from professional legal counsel. Please be advised the submittal of a reply to the online estate planning survey does not constitute a contractual relationship between the Law Firm and yourself and does not represent a binding legal obligation for the Law Firm to represent you in any administrative or court proceeding. Finally, submittal of a reply to an estate planning survey does not satisfy the requirements for a legal Will or other legal instrument under the law.
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