Estate planning can include a few or multiple documents to determine your wishes and the people you want to benefit from your estate. These documents can be personalized to meet your specific needs. Comprehensive estate planning provides significant benefits, but it is only useful if it is legally enforceable. An estate planning attorney is necessary when creating your estate plan.
Every plan is different, but understanding the benefits of some of the most common documents can help you understand the use of comprehensive planning.
A Last Will and Testament
A will is a basic part of a simple or comprehensive estate plan. It lists your assets, the beneficiaries for those assets, an executor to manage the estate, and a guardian for any minor children. A will provides several benefits, including:
- Your assets will not be distributed by the state’s intestate succession laws.
- You can choose who receives your assets, allowing your loved ones and/or preferred causes to benefit from your estate.
- You can name the executor for your estate, enabling you to name a friend, family member, or professional you trust with this important task.
- You can clearly state your wishes and intent, which may limit conflict between your loved ones who might contest an uncertain will.
- You are able to name a guardian for your minor children if you and/or your partner are unable to care for them.
However, a will does not avoid probate court. To keep your estate out of probate, you need more comprehensive estate planning, including the use of trusts.
Revocable and Irrevocable Trusts
A trust is also a document that distributes the assets in your estate, and it names a trustee to administer them. While a will is a public document that distributes assets in probate, a trust is a private legal entity that keeps assets out of probate. A revocable trust is amendable during your life, while an irrevocable trust is much harder to make changes to. There are several benefits to using trusts:
- You can better protect the beneficiaries of your estate.
- You can protect your assets more completely and also keep them out of the public record.
- Your estate can avoid probate court, saving your beneficiaries time and money.
- You can designate specific provisions for trusts, such as holding assets for a minor heir until they are 18 or only allowing assets in a trust to be used for specific purposes.
- A trust that also supports a will makes both harder to successfully contest.
- Assets in a trust can be distributed to beneficiaries much more quickly than those that are passed through a will.
Avoiding probate is one of the main goals of comprehensive estate planning. Probate can take months to years to resolve, and heirs do not have access to the assets that they inherited until probate is complete. When your estate enters probate, it is subject to state and federal taxes, court costs, and claims from debtors. This will detract from the benefits that your beneficiaries can receive.
Although some types of trusts are still subject to debtor claims, you can provide the maximum amount of benefits and protection.
Powers of Attorney
Powers of attorney are documents that give another individual the power to take action on your behalf. In estate planning, these documents are typically made to be enacted if you are incapacitated. That way, an individual you trust is in charge of these important decisions. You may designate a power of attorney for healthcare decisions, legal decisions, financial actions, or all these abilities.
The greatest benefit to having powers of attorney in your comprehensive estate plan is the security of knowing that you will be taken care of if you are unable to make decisions for yourself.
A Living Will
A living will, also called medical directives, allows you to outline your wishes for medical care. These are used if you are incapacitated and unable to make decisions regarding your pain management, preferred treatment, and other wishes. These are often guidelines used by your medical power of attorney. Medical directives give you control over how you are cared for in an emergency.
FAQs
Q: What Is an Advantage of Having an Estate Plan?
A: An advantage of having an estate plan is being able to effectively protect your estate and its assets, allowing you to pass them along to your intended beneficiaries. This is true of both simple and comprehensive estate plans, as both enable you to name recipients for your assets and list a trusted individual to distribute those assets.
Q: How Much Does an Estate Plan Cost in Kansas?
A: The cost of an estate plan varies significantly based on how it is created, how many documents you wish to include, and the complexity of your estate. When you have a large amount of assets or complex assets, an estate plan will take more time to create and may require the aid of financial professionals. It is more expensive to create an estate plan with an attorney but without an attorney’s guidance, the estate plan is less likely to be valid. If it is invalidated, all the work you put into its creation will not matter.
Q: How Can You Avoid the Illinois Estate Tax?
A: The most effective way to avoid the Illinois estate tax is to use a trust or trusts in comprehensive estate planning. The Illinois estate tax only applies to estates worth $4 million or more. To avoid the estate tax, the estate or the probatable amount of the estate must be valued under the amount. By placing most or all of an estate’s assets into trusts, the assets never pass to state jurisdiction but are distributed to their beneficiaries.
Q: How Much Does an Estate Have to Be Worth to Go Through Probate in Oklahoma?
A: An estate must be worth $200,000 or more to go through the formal probate process. There are two options for smaller estates:
- Summary Administration: If the estate is worth less than $200,000, it can instead be handled through summary administration, which is a simplified form of probate court.
- Small Estate Affidavit: If the estate is worth less than $20,000, it may qualify for a small estate affidavit and be able to skip the probate process entirely.
These options are useful for saving families time and money, but they must be filed for.
Creating Your Comprehensive Estate Plan
Comprehensive estate planning has the critical benefit of keeping your assets out of probate court, better safeguarding them, and limiting the costs that would cut into the benefits for your heirs. When you need a skilled attorney to help you craft your estate plan, contact Stange Law Firm.
