Estate Planning & The Law
Throughout our lives, we make many plans, usually for happy occasions like birthdays, graduations, vacations, weddings, and retirement, but when it comes to designing a sound estate plan that protects our families and our assets, necessary planning is often neglected if not actively avoided. Planning to protect your family in the event of your death or disability is not an easy thing to do, but it is necessary if you want your wishes to be fulfilled.
Planning for Disability
Clearly, if you become disabled or otherwise incapacitated, you will no longer be able to manage your own financial affairs; you’ll need someone else to do that for you. The question is “who?”
If you think that your spouse or adult children will automatically be granted this role, you’re mistaken. The fact is that according to estate planning law, unless you plan for your estate in the event of disability or incapacity, your family members will have to endure the lengthy and stressful process of petitioning the court to declare you legally incompetent. In addition, they may have to report your finances to the court year after year. Fortunately, you can spare your family this trouble by appointing someone you trust within a proper legal document.
Planning for Your Medical Care
In the event that you become incapacitated, your financial affairs will not be the only thing that require looking after. Perhaps most importantly, you’ll need to be properly cared for according to your wishes. Estate planning laws provide for the appointment of a trusted relative or friend to make decisions regarding your medical care using a durable power of attorney for health care. Furthermore, a living will created by a qualified wills attorney allows you to make your wishes known regarding the use of extraordinary measures should you become permanently unconscious or terminally ill.
If you leave your estate to your loved ones using a will, everything you own will pass through probate. The probate process is a notoriously protracted legal procedure. Studies in one state reveal that the median time for settlement is thirteen months. If the probate proceedings are contested, the ensuing legal battle can take several years. The length of the process often leaves spouses and children without access to the funds they need for basic living expenses.
Plus, since they take place in open court where the family’s private financial records are made a public record, probate proceedings also intrude on a family’s privacy. The family is forced to reveal for inspection a listing of all of the family’s savings, investments, and real estate. Also, now that probate courts are making their records available online, anyone with a computer could easily access your family’s probate records. In some cases, this easy access has led to identity theft. Fortunately, with proper planning, you can avoid probate laws and pass your assets on to your loved ones in a manner that is quick, inexpensive, and private.
The sad fact is that most parents provide better instructions for the babysitter who looks after their children for a few hours than they leave for the permanent care of their children in the event of their own disability or death. Why? Because this kind of planning isn’t an easy thing to do. Aside from the necessity of facing one’s own mortality, there are often emotionally charged issues that arise when we plan for our children’s care.
According to probate law, if you fail to leave instructions for how your children are to be taken care of in the event of your death, some stranger in probate court will make this decision for you. No one knows or loves your children more than you. No one knows better than you their individual needs and how best to protect them. Why would you leave such important decisions to a stranger?
Planning for minor children involves far more than mere economics. It involves creating an environment that will allow your children to experience both loving care and economic security as they grow into adulthood. Estate planning laws allow you to:
- Make lifetime gifts to your children
- Appoint a guardian for your child
- Leave your property to your minor children
- Plan for the special care of a disabled child
Estate planning law allows for many different options when it comes to providing for the care and upbringing of your minor children. You can choose to have your beneficiaries receive your assets directly or be held in trust and distributed over a period of time. A reputable trust attorney can provide you with expert counsel as you make these important decisions.
Planning for Death Taxes
The IRS will want to review your estate at death to ensure that you don’t owe them that one final tax: the federal estate tax. Whether you have a taxable estate depends on how much property you own at the time of your death. In effect, federal estate taxes constitute a double tax on your assets. Not only are your assets taxed when first earned, but then your lifetime savings are taxed a second time when you try to pass them to your children. Without proper planning, these taxes can take up to half of your life savings. Fortunately, federal and state estate taxes are almost always avoidable for those who make the time and effort to plan their estates.
Charitable Bequests – Planned Giving
A real win-win-win result is created by individuals or married couples who use one of the most powerful tools estate planning laws allow—Charitable Trusts. Your estate plan can provide for donations to charities of your choice in a variety of ways, either during your lifetime or at the time of your death. Depending on how your giving plan is set up, it may also let you receive a stream of income for life, earn higher investment yields, or reduce your capital gains or estate taxes.
Estate planning involves reviewing and analyzing your desires and finances today in order to insure that you and your family are prepared for tomorrow. It requires that you have a team of qualified professionals that will work together to make sure you receive an integrated estate plan of the highest quality. The captain of that team should be a qualified estate planning attorney who has the training and experience to turn your estate planning desires into reality.
Whether you’re looking for an experienced Chicago estate planning attorney or New York estate planning attorney, we can help!