Though estate planning is a personalized affair, there are some basic bases that everyone must cover. Let’s look at the rudiments of a typical estate plan.
Clearly, when you devise your estate plan, you leave behind inheritances to your loved ones. You have options with regard to the legal device or devices that you use to facilitate asset transfers after you pass away.
A last will would be the most basic option, but there are limitations and drawbacks that go along with the creation of a will. For one thing, you would be facilitating lump-sum distributions, and this may not be consistent with your wishes.
Plus, the inheritors would have to wait out the probate process, because the will would be admitted to probate after your passing. Nothing could be distributed to the heirs until the estate was closed by the court, and this can take close to a year, even if there are no complications.
There are various different types of trusts that can be utilized as an alternative. Certain trusts provide asset protection, and there are trusts that can be used to reduce estate tax exposure.
You could also use a trust to set aside resources for the benefit of a loved one with a disability who is enrolled in government benefit programs that are intended for people with financial need.
If you wanted to facilitate asset transfers outside of probate, you could use a revocable living trust.
These are a few specific options, but in general, your estate plan will include the right asset transfer vehicle or vehicles.
Latter Life Eventualities
In addition to the facilitation of asset transfers, your estate plan should address end-of-life eventualities. Many elders become unable to communicate sound decisions before they pass away. You could name representatives to act on your behalf in the event of your incapacitation when you create your estate plan.
A durable financial power of attorney could be used to name someone to handle your financial affairs. You could use a health care proxy or durable power of attorney for health care to name someone to make medical decisions on your behalf in the event of your incapacitation.
Your estate plan should also include a living will. This advance directive for health care is used to record your life-support preferences.
We have provided a thumbnail sketch in this blog post. If you would like to discuss your estate planning objectives with a licensed professional, our firm can help. We offer free consultations, and you can contact us through this page to set up an appointment: Indianapolis IN Estate Planning Attorneys.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.