It can be easy to put estate planning on the back burner. However, it’s not something that should be overlooked. Regardless of an individual’s age, income, or the size of an estate, everyone should have the proper documents in place to guarantee their wishes are carried out when they pass — or if the unexpected should arise.
Estate plans are not just for high net-worth individuals or those with a considerable amount of assets. They can also do much more than distribute your property at death. A good estate plan can help ensure the property you’ve worked hard to acquire during your lifetime is safeguarded. Not only can they be used to transfer assets to your beneficiaries, but an estate plan can also provide crucial guidance for your loved ones should you ever become incapacitated.
It’s never too early to ask yourself, “Do I need an estate plan?” There are many reasons it is beneficial to create one. But most importantly, by making sure the appropriate documents are executed, you can prevent a court or state law from deciding what will happen to your assets and property. An estate plan can also allow you to remain in control of what kind of medical care you will receive and how your finances will be handled if you become unconscious or incapable of managing your affairs.
Every estate plan is structured differently, based upon an individual’s specific financial situation and family needs. Depending upon the assets that make up your estate — including real property, stocks, vehicles, artwork, life insurance, and pensions — an estate plan can range from simple to complex. For individuals and families with significant assets, it may also be an essential tool used for financial planning — various types of trusts can be used in connection with an estate plan to help avoid significant estate tax consequences.
Most people are familiar with the concept of a will. However, many might not realize that a will is just one component of a complete estate plan. Although a will can dictate how you wish your property to be distributed at the time of your passing, an estate plan is much more extensive — it can outline how you would like your affairs to be handled not only at death but also during your lifetime if you should become incapacitated.
In some cases, a will may not be the appropriate tool to transfer your assets. Trusts are commonly used in estate planning and can help you avoid the public probate process as well as reduce estate taxes. You may also be able to pass assets to your loved ones while you are still living, depending upon the type of trust created.
In addition to a last will and testament, every basic estate plan should include a living will and a healthcare power of attorney. A living will — or an advance directive — can communicate what kind of medical treatment you wish to receive and stipulate any life-saving measures. A healthcare power of attorney gives a person whom you select the authority to make medical decisions on your behalf.
An estate plan may also include a financial power of attorney which would provide another person with authority to manage your finances on your behalf if you are incapable of doing so. This person would have the authority to pay rent or bills, withdraw money from your bank account, and make other decisions regarding your property.
While no one wants to think about the unexpected, an estate plan can provide you and your family with peace of mind in the event that it does. Depending upon your objectives and the legal tools that are used, an estate plan can:
A good estate plan should be specifically customized to achieve your goals. Once you’ve built the foundation for your plan, advanced estate planning can be integrated as necessary.
While estate planning can be done at any time during a person’s lifetime, there are a number of events that may occur and give rise to the need for an estate plan, including marriage or the arrival of children. An individual may also choose to execute estate planning documents or create trusts if they’ve acquired a considerable amount of assets. Additionally, if you’ve been diagnosed with a chronic illness, it’s critical to ensure any advance directives are properly executed.
If you already have an estate plan in place, you should ensure that it is reviewed periodically. Estate planning documents may need to be updated from time to time to ensure that they are current with any changes in the law, or your family circumstances. For instance, if the person you had named as your power of attorney passes, your documents should be revised. Beneficiary designations may also need to be updated as family dynamics change.
Everyone should have a basic estate plan in place to make sure their loved ones are provided for in accordance with their wishes when they pass. An experienced estate planning attorney can guide you through the complexities of the estate planning process and discuss your options. Our North Carolina estate planning attorneys at The Twiford Law Firm advise clients on all trusts and estates matters and help them to create comprehensive estate plans that reflect their intentions. With offices located in Moyock and Elizabeth City, we serve clients throughout Northeastern North Carolina. Contact us today to schedule a consultation.