What is an estate plan?

An estate plan is arranging for the management and distribution of your assets while you are alive, if you become incapacitated, and upon your death. If you don’t make an estate plan before you die, your state of residence will make one for you, in accordance with their intestacy laws. Frequently, state laws distribute property in a manner that is inconsistent with the wishes of the decedent. Creating an estate plan allows you to remain in control of your assets upon death.

A well crafted estate plan will typically include four main documents:

• Trust

• Pour Over Will

• Durable Power of Attorney

• Advanced Health Care Directive

These four documents are specifically designed to ensure that your wishes are carried out, that your assets and your loved ones are protected, and that your estate does not have to go through the high expense and delay of probate upon your death.

What is probate?

Probate is the court directed process that occurs after a person’s death in which assets are distributed and debts are settled. When a person dies with a valid will, the probate process will carry out the instructions in the will. When a person dies without a will or trust and they own real estate and/or have more than $166,250 in assets, their estate is subject to probate in order to determine who are the rightful heirs to that estate. The cost of probate includes court filing fees, attorney’s fees, and executor’s fees. Going through probate can take months, and sometimes years, to complete. Additionally, going through probate will make the deceased person’s assets, debts, and beneficiaries a matter of public record (as court documents).

How important is an estate plan if I have minor children?

As a parent, having an estate plan should be a top priority. You, better than anyone, know who would be the best person to take care of your children upon your death. Having an estate plan will allow you to select your child’s legal guardian and the manager of their inheritance until they are able to manage it themselves. You can also specify how you want your children to be raised, addressing issues such as religion, specific schools to attend, and where you want them to live. If you do not have an estate plan, you will be leaving these important choices to the probate court which will be unaware of your specific desires for the well-being of your children.

What are some other situations in which a trust may be helpful?

Trusts are helpful in many situations such as:

• Designating specific funds to be used for your children’s education.

• Selecting when a beneficiary is entitled to receive a distribution (such as waiting for your child to turn 25 before receiving their inheritance).

• Providing for care and maintenance of your pet.

• Distributing assets equally in a blended family.

How often should I update my estate plan?

You should revisit your estate plan every few years to make sure that it still accomplishes everything you want and no changes are needed. You should also update your estate plan if you have experienced a significant life event such as marriage, divorce, birth of a child, death of any of your beneficiaries, or a new medical diagnosis which may require you to have long term care or end of life planning. The Stokely Estate Planning Law Firm can review your current estate plan to discuss any necessary updates.

Should I have a trust, a will or both?

While having both is typically recommended, during your consultation with the Stokely Estate Planning Law Firm, the attorney will your review your goals and your assets to determine which estate plan would best fit your needs.