Did You Participate in Your Estate Plan?
You followed a career plan and worked your entire life to accumulate your assets. You might not have thought about an estate plan along the way. Now as a senior, you begin to think about your legacy and how you will pass on your assets. Unless you have your intentions documented, you’ll have no control over the distribution of your assets. And while it won’t matter to you, your family and loved ones will care. Read on about the importance of an estate plan and your legacy.
An estate plan is a legal document you create that discusses the distribution of your assets. Typical items included in an estate plan include property, providing income for your family, appointing someone to oversee your medical or financial affairs if you cannot, avoiding probate, and limiting estate tax.
Estate planning is never easy. It is often emotional and daunting. However, to maintain control over your assets after you pass away, it is important to have an estate plan. Here are some frequently asked questions to help you with your estate plan.
What documents are in an estate plan?
A Will. At the least, you will need a Will for your estate plan. Your Will gives authority to someone you appoint to oversee the distribution of your assets after you die. The challenge with a Will is that it goes through probate. Probate is a lengthy court process that distributes your assets according to your Will. Assets may include personal and real property, cash in your savings and checking account, pensions, retirement funds, investments, and life insurance. Probate also verifies your debt and ensures they are paid, including fees and taxes. You can also name a guardian in your Will to oversee your children or other dependents after you die.
Living Trust. You may choose to place your assets into a Living Trust. A Living Trust gives you full control of your assets while you are alive and transfers them to your beneficiaries upon death. Living Trusts avoid Probate. You name a Trustee to oversee your Living Trust after your death.
Advance Directive. Your Estate Plan should include an Advance Directive. An Advance Directive gives healthcare providers specific treatment orders in case you are not capable of speaking on your behalf.
Power of Attorney. Your Estate Plan should include a medical and financial Power of Attorney. Your medical Power of Attorney names your healthcare representative. Your healthcare representative has the authority to carry out your decisions in your Advance Directive. Your financial Power of Attorney names your Attorney-in-Fact, who has the authority to carry out your financial affairs.
Do I need an attorney to create an estate plan?
Yes. An attorney is needed to help you create your Estate Plan. You may want to consult your local bar association to find an Elder Attorney who specializes in Estate Planning.
What happens if I don’t create an estate plan?
If you do not have an estate plan, at least a Will, your estate will go through the probate process. The state will distribute your assets per Intestate Succession law. This law gives the state authority to distribute your remaining assets to your immediate family members, after fees, taxes, and paid creditors. Probate fees and expenses are often large and the process is time consuming.
Can I disinherit someone in my estate plan?
It isn’t necessary to disinherit someone from your Estate Plan. An Estate Plan names beneficiaries and administrators. If you do not want someone to inherit an asset, do not include them in your Estate Plan.
What estate taxes are due when I die?
Estate taxes are complicated and require professional help. Your Certified Public Accountant can help you with Estate Tax Planning. Your Certified Public Accountant can also help you with gift taxes. You can learn more about gift and estate taxes at the IRS website.
For more tips on real estate, aging-in-place, and not outliving your money, request a copy of our free book, The Northwest Indiana Guide for Seniors.