If you have a family, own a home, or have significant assets, there are some basic estate planning documents that will allow you to maintain control of your assets and personal choices while you are living and to protect and provide for your loved ones after you are gone.
An Advance Directive for Health Care allows you to appoint an agent who will give directions and make decisions about your health care when you are unable to do so. It also allows you to record your preferences and beliefs regarding medical treatment and end of life decisions. This ensures that your directions will be carried out by the trusted person you choose, and it helps avoid disagreements among family members.
Through a Financial Power of Attorney, you can designate a person to make financial decisions on your behalf in the event that you become disabled or incapacitated. This is a simple arrangement, but one that is essential in order to avoid a public, time-consuming, and expensive court proceeding to appoint a guardian and conservator. In the absence of a power of attorney, even a husband or wife would need to file a court petition to make decisions about assets held in the disabled spouse’s name or to sell a home owned as joint tenants.
Only through a Will can you appoint a guardian to care for your children in the event of your death and an executor to administer your estate. Without a will, a surviving spouse may inherit only a fraction of your assets, with the remainder bequested to children who would gain unfettered access to them at age 18. With a will in place, you are able to direct exactly how your assets will be distributed upon your death, and you can set up a testamentary trust to manage the inheritance of any minors until they reach an age of responsibility.
Establishing a Revocable Living Trust is a way to avoid the cost, delay, and public nature of the probate process for distributing assets. The couple or individuals who establish the trust (the grantors) are the initial trustees and maintain complete control of the trust assets (such as a home, bank accounts, investment accounts, a business) during their lifetimes. Upon the deaths of the initial trustees, the assets are controlled by a successor trustee named by the grantors and distributed to beneficiaries or held in trust for their benefit. All of this is done without the involvement of a court or public hearings, and at a lower cost than the probate process. A revocable living trust also provides for the management of a grantor’s affairs during a period of incapacity.
The owners of every successful small business should have in place a Buy-Sell Agreement as part of their business succession plan. A buy-sell agreement is an agreement between the company and its owners, often funded by life insurance, that sets the terms for the purchase of an owner’s interest upon their exit from the company. This can provide tremendous peace of mind for of the owners remaining in the business and the family members of a deceased or disabled owner.
If a large portion of your assets are held in IRAs, 401(k)s, or 403(b) retirement plans, you may want to establish a Stand-Alone Retirement Trust, or SRT. An SRT can afford you flexibility in naming contingent beneficiaries for retirement plan assets, extending the tax-deferred growth of the assets, protecting the assets from creditors and predators, and controlling how the funds will be spent by beneficiaries.
Through your estate planning, you can establish a Pet Trust that provides instructions and resources for the care of your animal companions in the event that you become incapacitated or pass away. You can name particular caretakers for your pets, or designate a trusted friend or relative to find permanent homes for them.
If you have been named the executor of an estate, it is important to have a legal advisor to help you navigate the requirements and court filings involved in settling the estate. We would start by giving you a checklist that serves as a guide to make sure that you are carrying out your fiduciary duty and complying with any probate court deadlines. We can then be available to provide as much or as little assistance as you need until the estate is closed. As a beneficiary of an estate, you may also need legal advice to make sure that you receive the benefits to which you are entitled under the terms of a will.