What Is Estate Planning, And Why Is It Important?

Q) What Is Estate Planning?

A) Estate planning is a process that gives you a say in what happens to your property and assets after you die. It can also give you a say in what happens toward the end of your life or in the event that you are incapacitated and unable to make decisions for yourself.

 Q) Do You Have To Be Wealthy To Have An Estate Plan?

 A) No! This is a very common misconception. Estate planning is for anyone who wants a say in what happens to their assets after they die—no matter what those assets may be. It is also essential for anyone who wants agency over decision-making if they become incapacitated. So, pretty much anyone over the age of 18 can benefit from estate planning, no matter how much or how little they have.

 Q) What Are Wills?

 A) A will is a document that assigns all of your assets and property to beneficiaries (or people who will receive them when you die). If you have minor children or guardianship over a disabled adult, a will can designate who you want to take over guardianship of them if you die or become incapacitated. It also allows you to appoint an executor, who will be in charge of handling your estate after you die.

 Q) What Is Probate? Can I Avoid Probate?

 A) When someone dies with a will and their assets exceed a certain threshold, their estate goes through a process called Probate. During Probate, if there is a will, the Court makes sure the will is valid, and that all creditors and taxes are paid from the estate. The remaining assets can only be distributed afterward.

Probate can be very long and expensive process, but it can be avoided in some cases. Many people set up their estate plans to avoid probate, often by using a trust.

Q) What Is A Trust?

 A) A trust is another type of estate planning tool. There are several different types of trusts, but they all transfer ownership of property and assets from a trustor to a separate legal entity (the trust) for the benefit of the trustor’s beneficiaries (those who will receive the trustor’s assets and property after they die).

One of the main reasons that people use trusts is to avoid probate. When a trustor dies, their assets and property are technically owned by the trust. This allows the trustor’s estate to bypass the probate process, transferring the assets and property directly to the beneficiaries according to the stipulations of the trust.

Q) What About Healthcare And End-Of-Life Decisions?

A) There is an area of estate planning that is focused entirely on these sorts of decisions. One of its main tools is a document called a Healthcare Directive, or a Living Will. It allows you to state your healthcare wishes in case you are incapacitated. Mostly, they deal with issues like resuscitation and life support, but can be adjusted to fit other wishes. This will help your loved ones make difficult decisions on your behalf, with the knowledge that they are following your wishes.

 Q) What About Legal Decision-Making? What Is A Power Of Attorney?

 A) Powers of attorney allow you to give a trusted person the ability to make decisions on your behalf if you are legally incapacitated. A Healthcare Power of Attorney allows someone to make medical decisions on your behalf. They are bound by your Healthcare Directive, but can also make healthcare decisions outside of it. A Financial Power of Attorney allows someone to make much broader financial decisions on your behalf. They have the power to handle all of your assets and property, to pay your bills using your money, and to both buy and sell your assets.

 Q) How Do I Make Sure My Insurance Policies And Bank Accounts Go To The Right People?

 A) The best way to do this is by updating your beneficiary designations. If you have, say, a checking account, you can make a beneficiary designation with the bank as part of your estate planning process. A form called a Transfer on Death Designation can state who you want to receive the funds in those accounts upon your death.

If you have any life insurance policies, you want to be sure that the right person is still listed as the beneficiary. For example, if you were married when you opened the policy and are now married to someone else, you may want to change the beneficiary.-

At Legacy Legal and Business Services PLC we believe that everyone has a vision for their life and the legacy that they will leave behind. That vision may include a need to preserve, manage, and transfer, acquired wealth, assist family members, and protect your children after you pass away.

The estate planning services of Legacy Legal and Business Services PLC provides clients with a unique opportunity to partner with an experienced lawyer such as Margaret L. Webb to make your vision become a reality.

More Information

• What Exactly Is An Estate Plan? When Do We Need It?
• Estate Planning Documents Required For Incapacity Planning In Michigan