I am not wealthy, why do I need to have an estate plan?
Even those without sizeable assets should have a basic estate plan. Estate planning is not only about protecting assets, but also about family. A complete estate plan will alleviate burdens on family members at difficult times, such as the death or incapacity of a parent. A complete estate plan also saves money. Generally, guardianship proceedings and probate proceedings are more expensive and cumbersome than execution of estate planning documents.
Some of the most important reasons for estate planning are to:
- Pass property to the intended beneficiaries.
- Alleviate the burdens of grieving family members.
- Protect the estate assets from unintended recipients.
- Deciding who will raise your children.
- Prepare for incapacity.
Even if you do not plan your own estate, everyone already has an estate plan; it is your state's intestacy and probate laws. The state in which you reside has predetermined that if you don't create any type of legal document, they will decide who is going to make decisions on your behalf. A judge will decide how to handle your estate if you become incapacitated. A judge will also decide who will care for your children. It is best to create an estate plan that reflects your wishes
What should my estate plan entail?
A basic estate plan should contain a Will, power of attorney and advance directive. Together, these documents prepare for death and incapacity.
Do I need an attorney to help with my estate plan?
Probably. Many states allow residents to prepare their own wills, and some retail stores or websites offer will kits and software. However, a self-prepared will, without the assistance of estate planning professionals, can be easily attacked by discontented beneficiaries after your death, can leave loopholes for unintended beneficiaries, and in many situations, be considered invalid right from the start.
There are many ways to save costs when it comes to estate planning. You can:
- Attend free educational seminars.
- Complete your advisor's questionnaire before walking into an estate planning meeting, and be prepared and decisive about this basic question: When, how, and what properties will be received by whom?
- Talk to an accountant who has estate planning expertise.
As laws and regulations in Washington, DC and Maryland can be complicated or change, it is highly important not to rely on piecemeal information and previous experience of friends and family members.
What if I change my mind?
Wills, revocable trusts, powers of attorney and advance directives can all be amended.
How is my property transferred at death?
Property is transferred at death in several ways:
- Valid will – A legal document created to express how a person desires his or her property to be distributed at death. It also names one or more persons to manage the estate through its final distribution.
- Beneficiary designations – Examples include life insurance policies, trusts, and death benefits of a retirement plan.
- Operation of law – A legal term indicating that a right or liability has been created for a party, irrespective of the intent of that party, because it is dictated by existing legal principles. For example, jointly owned property with a right of survivorship.
- State law – This will typically come into play if no will is presented for probate for a deceased.
Who is going to take care of my pets?
You may not need to set up a full-blown pet trust, but you may need to set aside sufficient funds to be put in trustworthy hands to take care of your beloved pet. If you have animals with long life expectancies, you may need more sophisticated planning, including a pet trust. Or, if you don't have someone you can rely on to take on your pets, especially if you have 17 cats or even two spiders, you will need to find an organization to take care of your companions for the remainder of their natural lives. Your estate planner can help you do this.
What should I do about my digital assets?
Although your e-mail and Facebook accounts will go dormant. But some folks have self-published books that are only accessible on line, journalists and photographers may have their life's work on a hard drive or saved in cloud storage. Plus there could be bank accounts you only receive e-mail statements for, blogs, Twitter, photo storage, and countless other financially and emotionally valuable assets accessible only by computer.
Your lawyer can help you figure out what needs to be preserved, what can be left to lapse, and who should be able to access these various accounts. There are a number of cloud storage sites, such as Dropbox, where you can store your passwords, and then you only need to give someone the password to access that information. Alternatively, you can leave the password to access your personal information in a safe deposit box or with your lawyer. Dealing with digital property is still in its infancy, and technology is ever changing, so there are no perfect solutions. But you and your estate-planning lawyer can explore the options and pick the one you are most comfortable with for now.
What happens if my partner and I die in a common disaster?
Even if you are certain about where you want your estate and children to go, you need to address ‘worse case scenario' Your estate plan should contemplate back-ups for your first choice guardian, trustee or Personal Representative.
What is succession planning?
Succession planning is a strategy for identifying and developing future leaders at your company — not just at the top but for major roles at all levels. It helps your business prepare for all contingencies by preparing high-potential workers for advancement.