What is an Estate Plan

August 12, 2020

When Should You Get an Estate Plan?

When should you get an estate plan? There are several times in your life you should strongly consider getting an estate plan. If you didn’t get an estate plan started the day you turned 18, then you should get your estate planning done as soon as possible.

If you think estate planning is just for the elderly think again. People lose spouses at all ages. People have accidents at all ages. Medical incidents strike without warning with devastating consequences. Children lose parents while they are still minors.

All of these things lead to the court based process of probate or guardianship.

You and your family deserve the comforting protection that an estate plan gives.

First, the day you turn 18. At this age, the most important documents are a durable power of attorney, healthcare power of attorney, and a HIPAA waiver. This is the age when children go off to college or trade school, join the military, and more. This makes them vulnerable. If they don’t have those powers of attorney, then mom and dad can’t manage their affairs if something happens to them. Often parents end up in court to get a Judge to give them legal permission to manage.

Joe, who was in his early 20’s, was on vacation in the Philippines. He got into an area of town an American probably shouldn’t have been in. He was found beaten, almost to death, in his hotel room. Once he was returned to the United States, his mother had to go through the additional stress and expense of getting a guardianship to manage his financial and healthcare affairs.

Mary went off to work at summer camp the summer before she was starting college. Without a durable power of attorney, her parents would have needed to forward all the college paperwork to her for signature, get her to sign, have to wait for it back in the mail, and then send it to the college. That would have added needless time to the process. Instead, they used their durable power of attorney to sign for her.

Second, today.

That is when should you get an estate plan.

August 10, 2020

Estate Planning Basics

Estate planning basics can mean either the basic documents for an estate plan; the basic documents you need to gather up; or the basic concepts of estate planning.

Estate Planning Basics – Documents

Last Will and Testament – gives the Judge a list and set of instructions for who gets what and how
Revocable Living Trust – keeps inheritance private to those receiving the inheritance, avoids probate, and protects assets during a lifetime
Durable Power of Attorney – says who can “step into your shoes” and take care of financial, legal, and personal affairs if a person can’t
Healthcare Power of Attorney – says who can make healthcare decisions if a person can’t
HIPAA Waiver (Protected Healthcare Information Release) – tells healthcare workers who they can share medical information with. Does not give permission for anybody to make healthcare decisions.
Living Will (Dying with Dignity Document) – If a person is in a coma, permanent vegetative state, or the end is imminent and the doctors say there isn’t anything else to be done then this tells the healthcare professionals what measures you want done to keep you alive.

Documents to Gather

You may need to gather up some basic documents and information for your estate planning.

Retirement account statements
Social Security statements
Pay stubs
Cash accounts (checking and savings) statements
Life insurance policies
Annuity contracts
Investment account statements
Car titles, values, and payoff amounts
Mortgages, current value, and payoff amount
Deeds

Concepts

Planning is an ongoing process, not a one time event
Planning protects people during their lifetime and beyond
Planning protects family
Planning avoids probate

As you can see, estate planning basics is a wide topic.

See Also

August 3, 2020

Is Estate Planning Necessary?

Is estate planning necessary? No. Let me explain…

If you don’t do your own planning, then the State has written a plan for you. So no matter if you write your own plan or not, you have a plan.

The unfortunate truth is that most people don’t want the State’s plan because it involves the hassles of going to court and seeing the Judge.

Guardianship. If you become unable to manage your own affairs during your lifetime because of an accident, major medical incident, stroke, heart attack, or dementia, your family will have to go to court for a Guardianship. A Guardianship is when the State grants another person power to make some of your decisions. Other decisions must go back to the Judge. And often a Judge is reluctant to allow sale of property or medical procedures not in the list.
Probate. After you pass, the State has written a Will for you in the State law. Their plan is technically called “Intestate Succession.” The State has decided who will get what, when, and how much. It pays little to no attention to special needs, credit issues, addictions, and many more things. The Judge will just divide the money up and lump sum checks are written to each heir.

So, is estate planning necessary? No. But, if you don’t write your own plan, then you are allowing yourself to be managed by the State. You are turning yourself over to a plan that is typically more expensive and more burdensome than you and your family need.

August 2, 2020

What is an Estate?

What is an estate? Is it a big house with gardens and manicured lawns? Yes and No.

An estate is a collection of property.

During most of your life, your estate is everything you own or have an interest in. Your estate is made up of your house, land, real estate, stocks, bonds, investment accounts, retirement accounts, life insurance, patents, the money in your wallet, your wallet, and much more.

However, at certain times, you estate is divided into 2 or more separate estates.

The first is during bankruptcy. Your estate gets divided into the bankruptcy estate and exempt estate.

The second is after death. Your estate gets divided into the probate estate and non-probate estate.

The probate estate is all your property that will have to be handled under the court supervised process of Probate. The rest of your possessions are the non-probate estate.

Estate planning deals with your estate. If you haven’t planned, then most of your estate will go through Probate and the State decides who gets what, how much, and when. If you have planned, then most of your estate should skip probate and go directly to the people you want, in the amounts you want, when you want, and how you want.

So, what is an estate?

A big fancy house with manicured lawns and
A collection of your property

August 2, 2020

Why do I Need an Estate Plan?

Do you want to leave all your important life decisions up to a faceless, “impartial” Judge if you can’t make them yourself? Or would you rather name somebody to make those decisions and keep you and your family out of expensive court.

Most people think that nothing bad will happen. That bad things happen to other people.

Unfortunately, in reality, bad things happen to all of us. We have car accidents. We slip on a wet tile floor or bath tub and hit our head. People have heart attacks, strokes, and more every day. Count yourself fortunate if you never had any kind of accident.

You plan for just those kind of events. If something does happen, you want a plan in place so people can spring into action immediately. You deserve to have the people you want make your decisions if you can’t.

You plan for your children. You keep them out of court seeking permission to make critical decisions for you or to distribute your final estate.

You plan for yourself. You keep who you want in control. You stop a Judge from deciding who is in control and how much power they have.

That’s why do I need an estate plan. That’s why you need an estate plan.

August 1, 2020

How do I Make an Estate Plan?

How do I make an estate plan?

Step 1: Decide on Your Goals

What are your important goals? Here is a list of important reasons that people have for planning.

Avoid probate. People like to make sure their family stays out of court and away from the Judge. They want to decide who gets their stuff and how much, not the State.
Avoid estate tax. People want to avoid paying any more tax than they must.
Ensure wishes. People like to know who will take care of them. Most people don’t want to leave it up to a Judge that neither they nor their family knows to make the decisions.
Pass with dignity. Many people like to know that they won’t be hooked up to machines and kept alive by the miracles of modern medicine alone.

Step 2: Decide Who does What

Who will be in charge of managing and distributing your final estate
Who will manage your financial and legal matters if you can’t
Who will make healthcare decisions for you if you can’t

Step 3: Decide Who gets What

Make a list of everybody you want to get something and write down what they get. With money it is usually better to decide in percentages than dollar amounts. What if you spend most of it?

Step 4: Decide How They Will Get It

Immediately and outright. Perhaps the most dangerous way to leave money
In payments. Some children would spend money as fast as they could get it. You can decide to spread out the money of 5, 10, or 20 years in equal payments with the remainder going to them at the end.
In trust. You can leave their money in a trust so that it is protected from future divorce and credit issues.
In trust. You can leave their money in a trust to protect them from themselves. That is from any addictions they may have like drugs, alcohol, or gambling.

That is how do I make an estate plan

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July 31, 2020

Is a Will Considered an Estate?

Is a will considered an estate?

No, a Will (Last Will and Testament) is not considered an estate. An estate and Last Will and Testament are two completely different things.

An estate in law is a collection of property. During your lifetime, you have an estate. Your lifetime estate is everything you own. Your estate is the sum of your assets – real estate, house, cars, bank accounts, cash in your wallet, your wallet, your clothes, jewelry, stocks, bond, patents, copyrights, and more.

When a person dies, their estate splits into two parts. The first part is an estate not subject to probate (the “non-probate estate”). The second part is the part that must go through probate (the probate estate). It is this second part that works in conjunction with a Last Will and Testament.

A Will (Last Will and Testament) is what tells the Judge how to divide up and manage your probate estate. Probate is the legal process of managing your probate estate. A Judge oversees probate.

Estate planning deals with planning and creating documents that affect your estate like a Will. But estate planning is more than that. It is about protecting you from undesired outside management of your affairs during your lifetime. It is about knowing you have done all you can for you and your family to protect. It is about stopping your worry.

Is a will considered an estate? No it is not.

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July 29, 2020

What is the Difference Between a Will and an Estate Plan?

What is the difference between a will and an estate plan? A Will is just one document of a complete estate plan. An estate plan is a comprehensive set of documents and procedures to protect you, your family, your money, and your property during your lifetime and beyond.

Your Last Will and Testament serves several purposes in an estate plan.

You Will names guardians for minor children.
Your Last Will and Testament tells the court how you want your final estate distributed to heirs and beneficiaries
A Last Will and Testament can create a trust
A Last Will and Testament directs the personal representative (executor) to pay your final bills and expenses.

Because a Last Will only has power after death, a Last Will and Testament CANNOT

Protect you, your family, your money, or property during your lifetime because a Will only takes affect after death!
Keep “strings” on the property. That is, exert control on the property even after you are gone.
Protect an inheritance from your children’s divorce, addictions, spending habits, and creditors unless the Will creates a Trust
Prepare you for the ravages of dementia and expenses of long term care. That falls to a Trust and Powers of Attorney.

An Estate Plan consists of multiple documents:

Last Will and Testament. Discussed above.
Durable Power of Attorney. Provides for management of your money during your lifetime if you become unable to do so.
Healthcare Power of Attorney. Provides for management of your healthcare during your lifetime if you become unable to do so.
Protected Healthcare Information Release. Give healthcare workers permission to talk to the people you list.
Revocable Living Trust.

What is the difference between a will and an estate plan? As you can see, there is quite a difference between a Will and an Estate Plan.

See Also

External Links

https://www.agerlawoffice.com/estate-planning/2019/11/15/difference-between-a-will-and-an-estate-plan/

https://www.quora.com/Is-estate-planning-the-same-as-a-will

July 26, 2020

How Much Should Basic Estate Planning Cost?

How much should basic estate planning cost?

Basic Estate Planning cost is only available for a basic estate plan.

A basic estate plan is the minimum plan needed for a simple estate.

A simple estate is one that is basically a house, car, checking account, savings account, and retirement account. Anything more than this needs more than basic planing.

A basic plan is one that avoids probate; divides the assets equally among children; no child is disinherited; nobody has special needs; nobody is getting government means tested benefits; and no child has addictions, a rocky marriage, or credit issues. If any of the preceding are not true, then you need more than a basic estate plan.

Quick research on the internet shows a range and some of it depends on if you are single or married. In great part, the cost of a basic plan is going to depend on several factors:

Where you live. Planning in New York City is going to probably cost more than in Des Moines, Iowa
The complexity of your estate. You might think it is basic, but it could be quite a complex situation. Children’s financial situations can quite quickly make your simple estate complicated. If you have special needs children, you need more than a basic plan.
The size of your estate. It might be simple, but if you own 5 rental houses, that adds to the fee
Your goals. While they may sound simple and straightforward, they are often complicated because of the number of goals
Blended families are often complex
If you own a business, it is more than simple

So, how much should basic estate planning cost? A basic will and beneficiary deed ranges from $895 to $1,295. A Trust can start as low as $1,395 and range upward from there.

See Also:

July 26, 2020

Simple Estate Planning Worksheet

While scouring the web for a simple estate planning worksheet, I could find no such thing. All I could find was “sample estate planning worksheet.” And many of those were anything but simple.

I could spend a lot of time here translating forms to a web page, but instead, I think it would be the most helpful if you know what is needed in a planning worksheet. There is not a best format for it. Spreadsheets or documents. Hand written or typed.

Your and your spouse’s personal information. Name, address, phone number, date of birth, date of marriage.
You children’s names and dates of birth. If deceased, date of death. If they are to be disinherited, note that.
How you want your final estate divided.
What you own, what you owe on each item. This is your net worth.
- Life insurance policies.
- Real Estate
- Bank Accounts
- Investment accounts
- Retirement plans
- Anticipated inheritance
- Any other valuable property
Who should raise your minor children if you can’t (if you have any)
If creating a Trust
- Your trustee in case of incapacity
- Your final trustee
If creating a Will
- Your personal representative
Your durable power of attorney agents
Your healthcare power of attorney agents
Everybody you want to be able to talk to healthcare professionals about your condition
And, what treatments you would and would not want in case of coma, permanent vegetative state, or the end is near and the doctors have done all they can.

See Also