You may have had the experience of putting off a responsibility because it seemed rather overwhelming, but at some point, you decide to tackle the beast. When you are done, you realize that you were overestimating the difficulty, and you wish you had gotten started sooner.
This is a scenario that can be applied to estate planning procrastination. A lot of people know that they should put a plan in place, but they keep dragging their feet because they expect it to be a huge ordeal.
In reality, when you work with a licensed estate planning attorney, everything will go smoothly. All of your questions will be answered, and you will receive recommendations so you can make fully informed decisions.
There are multiple details that can be tweaked, but there is a basic framework that is applied to every estate plan, and we will take a look at it here.
Clearly, the facilitation of asset transfers is at the root of the estate planning process. There are different ways to go about it, and the right way to proceed will depend on the circumstances.
Many people are surprised to hear that a will is not always the best choice, and you don’t have to be extremely wealthy to benefit from the utilization of a trust. The revocable living trust is a very commonly used device that can be ideal for a wide range of individuals.
A major benefit is the avoidance of probate. This is a legal process that will enter the picture if you state your final wishes in a simple will.
Probate is a public proceeding, and anyone that is interested can access probate records, so privacy is lost. There are innumerable expenses that accumulate while probate is underway, and no inheritances are distributed while the estate is being probated by the court.
How long will they have to wait? It depends on the complexity of the estate, but it will typically take eight months at minimum, and it can take considerably longer.
If you use a living trust as an alternative, you will act as the trustee while you are alive and well. In the trust declaration, you name a trustee to succeed you, and your heirs would be the beneficiaries of the trust.
You can include a spendthrift clause that would protect the principal from the beneficiaries’ creditors, and you would control the nature of the distributions. For example, you could provide a certain amount each month, or you could dictate some other type of incremental arrangement.
When the time comes, the trustee would follow your instructions and distribute assets to the beneficiaries. The probate court would not be involved, so the pitfalls would be avoided.
The revocable living trust is just one of many different types of trusts that can be used to satisfy various objectives. As we have stated, when you work with us, we will explain your options so you can make the right choices.
Your estate plan should include an incapacity component to address the eventualities and you may face toward the end of your life. With a living will, you state your preference regarding the use of artificial life-support methods.
Another directive that should be part of the plan is a durable power of attorney for health care. You use this document to name an agent to make medical decisions on your behalf if it ever becomes necessary. These would be situations that are not covered in the living will.
A provision contained within the Health Insurance Portability and Accountability Act (HIPAA) prevents doctors from communicating medical information with anyone other than the patient. You should include a HIPAA release to give your agent the ability to speak freely with your physicians.
On the financial front, you can name a disability trustee to act as a living trust administer in the event of your incapacity.
If you do not have a trust, you can execute a durable power of attorney for property. You should actually have a durable power of attorney even if you have a living trust, because you may have property in your personal possession that you never conveyed into trust.
We Are Here to Help!
As you can see, a potentially complex responsibility can be easily addressed when you engage legal counsel. If you are ready to schedule a consultation at our Big Island, Oahu, or Maui estate planning office, we can be reached by phone at 808-531-5391, and there is a contact form on this site you can use to send us a message.