Posted In: Coronavirus Resource Page & Trusts & Estates
By Lori R. Kilpeck on April 9, 2020
The current coronavirus pandemic has brought to the forefront the importance of reviewing estate planning documents and implementing an estate plan. One of the most important things you can do for yourself and your family is to work with an experienced estate planning attorney to prepare an estate plan. This will ensure your objectives and wishes are met and provide peace of mind that your family is protected.
An experienced estate planning attorney is necessary to achieve the following:
- Ensure that the appropriate person is designated to make health care decisions for you should you be unable to act for yourself and that your wishes are stated;
- Confirm that you have a trusted person designated to act as your financial power of attorney;
- Ensure that your estate planning objectives as to the disposition of your assets are met;
- Counsel on wealth transfer and planning strategies of businesses with a depreciated valuation due to the current market and economy;
- Provide a plan to reduce or eliminate estate taxes by maximizing deductions and credits;
- Discuss current estate tax exemptions and their sunset in 2025;
- Review and provide for complex estate and business succession planning;
- Analyze and make recommendations for planned and charitable giving;
- Assist and confirm that assets are properly titled pursuant to the estate plan;
- Review gifting and transfer on death, payable on death and survivorship designations and the effect of these designations on your estate plan;
- Assist with protection of assets in long-term care planning and creditor protection; and
- Ensure that your funeral and burial wishes are properly carried out upon your death.
Without an estate plan, disputes can arise with the succession of your business, your estate may pay substantially more in estate taxes, unintended beneficiaries may receive a portion of your assets pursuant to state law or be distributed outright to a beneficiary at eighteen (18) years of age. Issues may also arise as to who will be appointed as guardian of your minor children without an estate plan. Finally, a court guardianship may be necessary for you should you become incompetent without a Financial and Health Care Power of Attorney in place and a court-appointed guardian may not be someone you would have chosen as your guardian.
The following are basic documents every adult should have in place:
- Last Will and Testament - Your Last Will and Testament provides for the distribution of your probate assets, nomination of a guardian for your minor children and designation of an Executor who is responsible for finalizing your estate. It is important to keep in mind that a Last Will and Testament only controls probate assets, which are assets that do not have a beneficiary, are not jointly owned with rights of survivorship or are not placed in trust during your life. An Executor’s duties include collecting all probate assets, paying debts, estate taxes, if any, and final expenses, preparing final tax returns, and distributing the remaining balance to the beneficiaries.
- Trust Agreement - There are many types of trust agreements to achieve your estate planning goals and objectives. Trusts can be irrevocable or revocable and can be used to protect and preserve your assets, to make gifts to your children without giving them control over the gift, to reduce or eliminate estate taxes, to retain assets until a beneficiary reaches a certain age or for the beneficiary’s lifetime, to provide support for disabled beneficiaries, and to afford privacy. Trusts are also used to implement sophisticated and complex business succession and charitable giving plans. Careful consideration should be given to the designation of your Trustee as the Trustee will oversee the trust (including the investment of trust assets), be responsible for payment of expenses, ensure that tax returns are filed, and disburse the trust assets pursuant to the terms of the trust agreement.
- Health Care Power of Attorney and Living Will Declaration - A Health Care Power of Attorney designates an agent to make health care decisions, including end of life decisions, when you are unable to make those decisions for yourself. The Living Will Declaration states your wishes regarding medical care and end-of-life decisions. Having these documents in place can avoid the need for a court appointed guardian of your person.
- Financial Power of Attorney - A Financial Power of Attorney designates an agent to make financial decisions for your benefit and is most often used when you are unable because of physical or mental incapacity to properly manage your financial affairs. Having a trusted agent in place to handle your financial affairs should avoid the need for a court appointed guardian of your estate in the event of your incapacity. A Financial Power of Attorney can become operative immediately upon signing, or can become operative if and when you are unable to manage your affairs, based on medical opinion.
Having all of these documents in place will ensure an orderly transfer of your assets after your death as well as provide appropriate management of your financial affairs during your lifetime in the event of your incapacity as well as guidance to your family with end of life decisions. Please feel free to contact a member of Brouse McDowell’s Estate, Succession Planning & Probate Administration Practice Group for more information or assistance with your estate plan. We would be pleased to answer your questions.
This blog is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for legal advice. Such advice should always come from in-house or retained counsel. Moreover, if this Blog in any way seems to contradict advice of counsel, counsel's opinion should control over anything written herein. No attorney client relationship is created or implied by this Blog. © 2021 Brouse McDowell. All rights reserved.