What is an Estate Planning Attorney?
Estate planning is a broad term that encompasses a range of specific actions, documents and goals. An estate planning lawyer, at its most basic level, arrange the distribution of your assets after your death. Part of estate planning also involves ensuring that others are able to care for you if and when you become incapacitated and are unable to care for yourself. Finally, a good estate plan allows for you to care for family members and friends, distributing property as you wish to those you want to have it.
Estate plans are so important because they give you a say in what happens when you are no longer around to exert control. Estate plans offer a roadmap for those around you, explaining to friends and family member how you want things done. They allow you to have control over what happens to you should you become critically ill and can allow
you to rest easy that your wishes will be followed.
When should you talk with an estate planning lawyer?
Though you may not initially understand it as such, estate planning is a process, not a solitary event. Many people believe that an estate planning attorney simply writes a will or creating a trust. Many think that once the will is done, so is the need to continue thinking about the future. The reality is that estate planning is an ongoing activity, something that shifts and changes along with your life. Friends and family come and go, wishes change, assets are bought and sold. All are example of life events that can cause reconsideration of your existing estate plan. Rather than viewing a plan as fixed, try and think of estate plans as being easily responding to and reflecting the changing reality of your life. As a result, you will need to update estate plans periodically, checking in to be sure the plan you have in place continues to accurately reflect your desires.
What happens without an estate plan?
One thing to understand about estate planning is that everyone has a default plan in place, whether they realize it or not. That’s because laws exist that deal with distributing a person’s assets once they are no longer alive. Without a will, state laws, known as intestacy laws, will dictate how your assets are distributed. Though you may be fine with the way the law has chosen to divide your assets, you might not. You may want to leave more money to one person and less to another, or money to a friend or charitable organization, both of which would be excluded otherwise. To ensure your wishes are followed, it is essential that you sit down with a South Carolina estate planning attorney who can help you achieve your goals while minimizing cost and hassle.
What wills do
Wills allow a person to decide how property will be distributed after their death. The choice is entirely your own; you have the freedom to give whoever you want whatever you want, so long as you are the legal owner of the item. Beyond distribution of property, wills also allow parents to designate guardians for their children. This not only ensures that someone you approve of will be in charge of your children, but also minimizes the potential court involvement in the care of your kids. Wills are also used to name an executor to manage the distribution of your estate and to ensure that property passes to those who might not otherwise have a legal claim, including friends, stepchildren or charitable organizations.
What wills don’t do
Your will does not control the distribution of assets that are passed based on beneficiary designations. These assets include things like life insurance, certain retirement accounts, accounts payable on death and property that is jointly titled with a right of survivorship. For example, real estate owned with a right of survivorship would automatically pass along to the other surviving owner. The same thing would happen with a 401(k) or life insurance policy, which pass to the named beneficiaries.
What is a trust?
Trusts can be very powerful estate planning tools, allowing you more flexibility over other more common techniques. More specifically, trusts exist to hold property in the care of a trustee in accordance with a written contract for the benefit of one or more people, known as beneficiaries. The person who creates the trust is known as the grantor or settlor. Trusts can be either revocable, meaning they can be changed or revoked by the settlor, or irrevocable, meaning they cannot be changed.
Benefits of a trust
One of the primary benefits of creating a trust is probate avoidance. With a will, your estate will go through the probate process. With a trust, there is no probate process. Instead, your trustee will pay any debts of the estate according to specific instructions as well as distribute any assets. This can dramatically reduce the time involved in distributing assets, making for a quicker, and given the speed, likely cheaper process. Another benefit of a trust over a will is privacy. Wills and the probate process take place in courts. As a result, the process and the contents of the will is a public record. Trusts, on the other hand, are private matters and are a great way of keeping potentially sensitive information private.
Are trusts only for rich people?
Absolutely not. This is a common misunderstanding and something that can scare people away from an estate planning tool that might really benefit them. Trusts can be used by families of all income levels for a variety of reasons. One example of how a trust can be beneficial for nearly any family is when parents with young children create a trust so that if both parents die while the children are still young, assets will be managed by a trustee until the children are old enough to handle the responsibility themselves.
What is probate?
Probate is the formal process whereby a court acknowledges the authority of a will and appoints someone (the executor) to administer the estate of a recently deceased person. This involves paying any debts of the estate and distributing assets according to either the will or, if there is no will, state intestacy laws.
What is excluded from probate?
Though you may assume that anything left behind will fall under the probate umbrella, the reality is that many types of property pass outside the probate process. First, those items that are included in a trust do not pass through the probate system. Second, property that passes according to named beneficiaries also passes outside of probate. This means that retirement funds, life insurance money and real estate held with a right of survivorship all pass outside probate.
Is probate always a bad thing?
Many people are critical or probate, accusing the system of being too slow, cumbersome and expensive. Critics argue that loved ones have to wait months and, if the will is contested, potentially years before receiving property they were promised. This can be especially devastating in cases involving small businesses. Having a company tied up in the probate process can make decision-making grind to halt, killing an otherwise healthy enterprise. It is certainly true that in some cases probate can be a very bad thing and should be avoided if at all possible. However, in other cases, probate may not be so bad. Probate allows a judge to supervise the distribution of assets, something that can be important in cases where family members may not agree with the division of assets or may be suspicious of each other. Probate allows for a second set of eyes to approve payment, providing some needed scrutiny and sense of fairness. Additionally, in simple cases, probate likely will not drag along and heirs should receive assets in relatively short order.
Living wills and health care powers of attorney
With the dramatic increases in medical technology that have occurred in recent years, people are living longer than ever before. Though this is a great thing in nearly every respect, it does present problems that were seldom encountered previously. For instance, people who are living longer may find themselves in a position of incapacity, unable to make decisions on their own. In anticipation of cases like this, individuals can create living wills and health care powers of attorney to ensure that their medical care is looked after when they are unable to do so themselves.
What is a living will?
In a living will, a person explains to his or her doctor what to do if they become incapacitated. The living will affects issues of life support, explaining what you would or would not want done if you are terminally ill and unable to speak for yourself. The living will looks ahead, deciding in the future what you want done without knowing the specific facts, serving as a guide for doctors and your health care power of attorney regarding your wishes when it comes to end-of-life care.
What is a health care power of attorney?
A health care power of attorney allows you to appoint someone, an agent, to act on your behalf regarding issues of health care. Health care powers of attorney are not limited only to issues of life support, but can be very broad, allowing your agent to make a multitude of decisions related to your care. While living wills look forward, health care powers of attorney allow you to empower someone to act in the moment, making decisions as the need arises. Though this person can be guided by general principles, the decision will ultimately be theirs and will be informed by the specific circumstances of your health.