Understanding The Basics Of Estate Planning
Perhaps you have thought about creating your estate plan for some time. Or perhaps the death of a loved one has made you think about your own estate. Whatever reason you have for considering an estate plan, understanding what an estate plan consists of is your first step to creating one that is right for you and your loved ones.
At Bieber & Czechowski, we are a full-service law firm that has focused on estate planning for over 40 years. Our primary goal is to work with our clients to give them the personal attention and service they deserve. You are unlike anyone else, and your estate plan should be tailored to your situation and your goals.
Comprehensive Estate Planning Guidance
Many people think an estate plan begins and ends with a last will and testament. While a will can be a useful estate planning tool, a comprehensive estate plan does more than just say where your assets should go after you die. You are planning for unforeseen events while you are alive as well. Your estate plan should consider the following basics:
- Durable power of attorney — There may come a time when you can no longer handle your own financial affairs. Now is the time to consider appointing a trusted person to act on your behalf when that time comes. Powers of attorney are also useful if you need temporary assistance.
- Advance directives — These documents may include a health care directive and a power of attorney for health care (also known as a patient advocate directive in Michigan). They allow you to appoint a health care agent who can make medical decisions for you when you cannot. They also state your wishes for prolonged care or end-of-life decisions, which takes the burden from family members to make these decisions for you.
- Living trust — Trusts come in many forms, but most people choose a living trust because they can control it while they are still alive. A trust acts as another entity that you can give your assets to. A trustee controls the trust assets. Many people act as their own trustee while they can and name a successor to take over if they can no longer handle the responsibility or after their death. Assets owned by the trust do not go through probate when you die.
- Naming beneficiaries — Many accounts you already own, such as retirement assets and investments, already request a named beneficiary for the account. These assets do not go through probate if they are kept up to date. These assets are often referred to as transfer on death (TOD) or payable on death (POD) accounts.
- Last will and testament — Your will deals only with assets not held in trust or in a TOD or POD account. Any assets left only in your name will go through the probate process. You need to consider who you want to leave these assets to, in what percentage or amount and who you want to act as your personal representative. That is the person who will administer your estate on your behalf.
Preparing For Your Estate Planning Meeting
Many clients ask what they should bring to their first meeting with an estate planning lawyer. We recommend you gather the following items:
- Investment and bank account statements
- Real estate documents
- Any prior estate planning documents
- Life insurance policies
- Names, ages and addresses of family and friends
- Information on any businesses you own
In addition, spend some time thinking about people you may trust to serve in important roles, like health care agent, personal representative or trustee. If you have minor children, decide who you would want to act as their guardian if something happened to you.