Estate Planning Basics
Most people know the prudent thing to do to protect their assets and provide future financial assistance for their family is to invest the time and effort into creating a well thought out estate plan. What may be unclear, however, is how an estate plan works and what they typically include. First, estate plans are not limited to dealing with a person’s affairs after death, and greatly diverge from the commonly-pictured scenario of dividing a person’s belongings under the terms of a will. They may also be formulated to address personal and financial concerns during a person’s life, and include many more options beyond a will, though wills are a basic component everyone should consider. Constructing an estate plan that is best suited to address a person’s desires and needs is rarely straightforward, and often involves choosing among a number of complicated options, which is the primary reason why consultations with an experienced estate planning attorney should be held. However, having a basic understanding of what estate planning entails and the types of documents that frequently appear should offer two advantages: it would allow for more productive attorney consultations and relieve some of the anxiety often felt when delving into this process.
What an Estate Plan Can Do and a Few Considerations that Determine Its Structure
Estate plans are typically created to deal with the following issues:
- distribution of assets after death (the principal purpose generally associated with these documents);
- minimizing taxes and legal costs, e., avoiding probate;
- reducing family conflict over the division of property;
- addressing the management of a person’s personal and financial affairs in the event he/she becomes incapacitated; and
- providing for family members with special needs.
The structure and complexity of an estate plan will primarily be determined by the type and quantity of assets an individual owns, as well as the overall purpose of the estate plan. For example, if a person is only concerned with dividing their property after death and owns few assets, a basic will may suffice. However, if someone is seeking the more complicated purpose of avoiding the costs and time of probate administration and/or the need for a guardian over property during his/her life, some type of trust and specific will provisions will be necessary. Thus, when deciding on the appropriate estate plan, one of the first and probably most important decisions to be made is deciding what the underlying purpose of the entire plan is.
The following are some of the most commonly-used documents in estate plans, as well as a description of their general aim:
- will – the general roadmap that guides the distribution of property at death, and catches any property not distributed by other methods, if applicable;
- trust – places property in the control of a trustee and often used to minimize estate taxes and protect assets from creditors;
- durable power of attorney – transfers authority over management of finances during life, if incapacity occurs;
- health care surrogate – designates another person to make medical decisions if someone is incapacitated; and
- living will – directs when to administer life-sustaining measures in certain end-of-life circumstances.
Contact an Estate Planning Attorney
Putting together the right estate plan is an important, but complicated, decision that greatly benefits from the advice of an experienced estate planning attorney. The Tampa law firm of Bubley & Bubley, P.A. knows how to craft a comprehensive estate plan to meet all your needs and desires. Contact us to schedule a consultation.