“In this world, nothing can be said to be certain except death and taxes.” This quote is widely attributed to Benjamin Franklin and it reminds us that we’re all headed towards the inevitable. Because of this, enlisting the help of an estate planning firm — and an estate planning attorney — is prudent, since you can’t take your wealth with you.
The Difference Between a Will and an Estate Plan
To most people, estate planning means penning a will that will lay out who gets their belongings when they pass. They might even put together a detailed will that does things like appoint guardianship to any children they have. While that’s a good start, it’s not enough. A will is only part of the puzzle.
What Does an Estate Planning Firm Do?
It’s important that you have more than a will. You need a comprehensive estate plan. In addition to your will, this creates a multi-tired plan that spells out exactly what is to happen if you are ever ill, incapacitated, or pass away.
An estate plan will include documents such as:
A Living Trust
One of the benefits of using an estate planning firm is that they know how to set up your estate plan in a way to minimize the tax burden to your heirs. A living trust is often a part of this plan. In addition to tax benefits, a living trust can prevent assets from having to pass through the probate process. Since this process is often lengthy and expensive, skipping it can save your heirs time and money.
Another wonderful aspect of living trusts is that they give you greater control of your assets once you pass on. Once you place assets in a trust, you can appoint a trustee to manage them until your heirs are of age. Trusts are also useful in protecting assets from creditors and lawsuits.
Powers of Attorney
These documents appoint specific individuals to make decisions on your behalf if ever you’re sick or injured and unable to competently make important choices about financial or medical issues. A medical power of attorney allows someone else to decide what happens in regards to your medical care. Meanwhile, a financial power of attorney will allow them to make decisions that could involve financial accounts that are in your name.
Living Will
Quite different from a regular will, a living will lets everyone know your medical wishes if ever you’re incapacitated. These documents provide clear instructions on what you’d like to happen if you cannot be resuscitated or are put on life support.
Don’t Leave It to Chance
If you are incapacitated or die without a proper plan in place, it can create chaos for your grieving loved ones. This kind of situation was on full display after legendary pop star Prince passed away without a will. In these cases, decisions about the deceased person’s estate are left up to the state. They’ll appoint someone from the court system to make financial decisions on your behalf, including deciding how your assets will be used to provide care for you. Your family members will play no part in these decisions.
Should you die, your assets will be thrust into the probate process. In most cases, your spouse and children (if you have them) will all receive a portion of your assets. If you and your spouse both die and you have minor children, the courts will appoint a guardian for them.
Don’t Do It Yourself
Clearly, there are a lot of things to consider when putting together a comprehensive estate plan. While it may be tempting to fill out a few documents through a do-it-yourself online legal service and call it a day, this could leave gaping holes in your plan. An experienced estate planning firm knows how to customize a strategy that will ensure that you and your loved ones are fully covered.
If you need help with estate planning and want to go beyond the typical estate planning firm, Northeast Ohio estate planning attorney Matthew C. Bangerter, ESQ. can help. Click here for an initial consultation or call (440) 241-4237 to start planning your future.