Estate planning is not just for the rich.
If you don’t make
arrangements for what will happen after you are gone, the government
will step in and make all those decisions for you—and they may not be
the decisions you’d choose. The process will also be more difficult and
costly for your family, so it’s important to do it yourself while you
still can.
arrangements for what will happen after you are gone, the government
will step in and make all those decisions for you—and they may not be
the decisions you’d choose. The process will also be more difficult and
costly for your family, so it’s important to do it yourself while you
still can.
The most basic estate-planning document is your will. This is where
you leave instructions on who should handle your affairs—and how they
should be managed—after you are gone. Although it may sometimes be
possible to make arrangements that get around the need for a will, it is
a good idea to have one anyway, just to be sure that you have covered
everything.
you leave instructions on who should handle your affairs—and how they
should be managed—after you are gone. Although it may sometimes be
possible to make arrangements that get around the need for a will, it is
a good idea to have one anyway, just to be sure that you have covered
everything.
Clients often ask if they have to go to a lawyer to
prepare their wills. While even a scribbled note is better than
nothing, the answer is yes, you do need to go to a lawyer. Although
downloadable forms are available online, a lawyer will make sure that
you have addressed every concern. A good trusts and estates lawyer will
also be able to point out problems and pitfalls that you may not be
aware of.
prepare their wills. While even a scribbled note is better than
nothing, the answer is yes, you do need to go to a lawyer. Although
downloadable forms are available online, a lawyer will make sure that
you have addressed every concern. A good trusts and estates lawyer will
also be able to point out problems and pitfalls that you may not be
aware of.
One of the most
important parts of any will is the designation of a guardian for young
children in the event both parents die before a child turns 18. Both
parents may not see eye to eye on this matter, and these discussions are
often difficult, but while the chances of this happening are slim, the
consequences of not documenting a guardian are great. Informal
arrangements don’t count for much, and a judge can appoint
anyone—relative or not—that they deem appropriate.
important parts of any will is the designation of a guardian for young
children in the event both parents die before a child turns 18. Both
parents may not see eye to eye on this matter, and these discussions are
often difficult, but while the chances of this happening are slim, the
consequences of not documenting a guardian are great. Informal
arrangements don’t count for much, and a judge can appoint
anyone—relative or not—that they deem appropriate.
I have personally seen it happen: When two
married friends died in a plane crash, leaving behind a young daughter,
both of their extended families immediately came forward.
married friends died in a plane crash, leaving behind a young daughter,
both of their extended families immediately came forward.
They
were all good people focused on nothing more than what was best for this
little girl, but they didn’t agree on what that was. And so the
squabbling began.
were all good people focused on nothing more than what was best for this
little girl, but they didn’t agree on what that was. And so the
squabbling began.
Fortunately, it turned out that the couple had, in fact, signed
their wills before leaving on their trip, and the documents named the
wife’s brother as legal guardian to their daughter. Once that fact
became common knowledge, the arguing stopped and everyone fell into
line. From that point on, they all knew what to do.
their wills before leaving on their trip, and the documents named the
wife’s brother as legal guardian to their daughter. Once that fact
became common knowledge, the arguing stopped and everyone fell into
line. From that point on, they all knew what to do.
If you have
young children, you absolutely must address this issue in your own
will. Even if you and your spouse have trouble reaching an agreement,
leaving it to the courts and warring relatives would be a worse
scenario.
young children, you absolutely must address this issue in your own
will. Even if you and your spouse have trouble reaching an agreement,
leaving it to the courts and warring relatives would be a worse
scenario.
Your plans might also include providing for a trust. Trusts come in
two varieties—revocable and irrevocable—and yes, both require an
attorney. A revocable trust is one you set up when you are alive and
that you can cancel, revoke or change any time you want to.
two varieties—revocable and irrevocable—and yes, both require an
attorney. A revocable trust is one you set up when you are alive and
that you can cancel, revoke or change any time you want to.
A
revocable trust can be used to help manage your affairs while you are
alive and distribute assets when you are gone. They tend to be popular
in some states but less useful in others.
revocable trust can be used to help manage your affairs while you are
alive and distribute assets when you are gone. They tend to be popular
in some states but less useful in others.
An irrevocable
trust generally cannot be changed once it is set up. It can be created
either while you are still alive or later, through your will.
Irrevocable trusts can offer transfer tax, creditor protection and
management advantages but also can have significant drawbacks. Since
these trusts are, true to their name, irrevocable, it is very important
to get good legal advice if you are thinking about creating one.
trust generally cannot be changed once it is set up. It can be created
either while you are still alive or later, through your will.
Irrevocable trusts can offer transfer tax, creditor protection and
management advantages but also can have significant drawbacks. Since
these trusts are, true to their name, irrevocable, it is very important
to get good legal advice if you are thinking about creating one.
Everyone over the age of 18 should have a
health-care proxy—a legal document designating someone to make
health-care decisions for you if you are not able to. We used to think
of these only for the elderly—until, that is, the Virginia Tech
shootings of 2007, when parents of unconscious victims were excluded by
medical privacy laws from being involved in critical medical decisions.
health-care proxy—a legal document designating someone to make
health-care decisions for you if you are not able to. We used to think
of these only for the elderly—until, that is, the Virginia Tech
shootings of 2007, when parents of unconscious victims were excluded by
medical privacy laws from being involved in critical medical decisions.
Older or younger, we all need to have a health-care proxy. These forms
can be prepared by an attorney but are also commonly available online
and via health-care providers.
can be prepared by an attorney but are also commonly available online
and via health-care providers.
So how do you find a good
estate-planning attorney? While the Web provides many search
opportunities, I suggest getting recommendations from people you respect
and trust. You can also check with your local bar association for a
listing of estate-planning attorneys in your area. You don’t need the
most high-priced, sophisticated attorney, but you don’t want someone who
“also does wills,” either.
estate-planning attorney? While the Web provides many search
opportunities, I suggest getting recommendations from people you respect
and trust. You can also check with your local bar association for a
listing of estate-planning attorneys in your area. You don’t need the
most high-priced, sophisticated attorney, but you don’t want someone who
“also does wills,” either.
Instead, seek a lawyer who specializes in wills and does this routinely.
Source: CNBC