5 Essential Components of a Quality Estate Plan

When people think about estate planning, they generally think about a will or a trust, detailing how they want their assets divided in the event of their death. This is certainly a vital component, but there is much more involved in a complete, quality estate plan.

Our recent blog posting described WHEN you might need to modify your estate plan, noting that your estate plan should be adapted to coincide with the transitions of your life. Our prior posting describes when and why you should look at making changes to your estate plan… but what all should be included in the estate plan to begin with??

Each individual’s estate plan is different and tailored to their unique situation. However, in creating any quality, comprehensive estate plan, the following components should be considered:

1) Will: This is a legally binding statement which states who will inherit your property upon your death. Your will should appoint a legal representative (executor) to carry out your wishes and should name a guardian to care for your young children if both parents become deceased. In terms of property, there are limitations to what type of property can be covered by a will. Assets that are outside of probate (property in trust, life insurance proceeds, etc.) are not covered. Our estate planning attorneys can help you sort through these limitations and understand your options.

2) Consider a Trust: A trust is a fiduciary arrangement which allows a third party (“trustee”, often a bank or institution) to hold assets on behalf of a beneficiary. There are many different ways trusts can be arranged which detail when and how assets are passed to beneficiaries. Many people choose to hold their property in a trust to save time and expenses for their beneficiaries, minimizing estate taxes and allowing them to avoid going through probate court.

3) Power of Attorney (for finances): With a durable power of attorney, you may appoint someone you trust the authority to handle your property and finances should you become debilitated and unable to handle these matters on your own. This designated person is also referred to as your “attorney-in-fact”, though they don’t need to have any legal background. If you don’t have a durable power of attorney in place and there should become a need for someone to handle your financial affairs, the court has to go through the process of appointing someone. This takes time, may be expensive, and the court-appointed person may not be your preference, making it essential that you have this component as part of your estate plan.

4) Health Care Directives: A clear health care directive is essential to protect your wishes if you become debilitated and unable to make medical decisions for yourself. This includes a health care declaration (or “living will”), instructing health care providers about your medical wishes, such as preferences around life support. The health care directive also includes a power of attorney for health care, which involves appointing someone to make health care decisions if you become incapacitated and cannot make them for yourself. In Washington State, the Advance Directive combines your living will and durable power of attorney for health care into one document.

5) Final Arrangements: It is advised that you make your wishes known regarding what to do with your body when you pass away. You may detail your preference for burial or cremation, for example, and/or your wishes around organ and body donation.

Other components to consider when developing your estate plan may include:

  • Life insurance considerations
  • Covering funeral expenses
  • Protecting your business if you are a business owner
  • Beneficiary designations
  • Understanding probate
  • Management of your minor children’s inherited property
  • Guardianship considerations

Legal Representation:

Whether you are starting a family, nearing retirement, facing end of life decisions, or simply want to clarify your wishes and plan for the future, you need an experienced and compassionate estate planning professional to assist you in developing the plan that is best for your family.

Our estate planning attorneys are committed to understanding your unique situation and developing an estate plan that matches your needs and wishes appropriately. We provide all levels of estate planning services, from basic to more complex and everything in between. Please contact us today for a Free Consultation so that we may begin helping you plan for the future.

 

7 Events that Indicate it is Time to Update Your Estate Plan

Our life circumstances change and we need to modify our estate plans accordingly. Estate plans should be adapted to coincide with the transitions of life. It is recommended to review your accounts, beneficiaries, and overall estate plan yearly, but there are also specific life events that impact your estate plan and should signal that it is time to make updates.

Just about any family law life change indicates a good time to update your estate plan. Here are some examples of life events that indicate its time for review and possible revision:

  • Marriage: With no more wedding planning to distract you, it’s time to focus on making the necessary adjustments to your estate plan. You should review and modify your will, trust, and other estate documents to reflect your wishes pertaining to your new family. You need to determine how you want to include your spouse and look at how it relates to the interests of your own existing children, if you have them. Custodians should be named for any underage children, and if it is a blended family, you will need to determine if/how to include any stepchildren. This is also a good opportunity to remove anyone who you no longer wish to be named in your estate plan, such as an ex-spouse, if you have not done so already.
  • Divorce: This is an essential time to review your estate plan and make modifications to reflect your major life change. It would be the best time to remove your ex-spouse as a beneficiary, assuming you do not want your ex to receive your assets in the event of your death. You should also look at life insurance policies, pensions, and all other accounts, making the appropriate changes, protections for children, etc.
  • Birth or Adoption of a Child: With the birth or adoption of a new child, parents should immediately amend their will to include guardians to care for the child in that the event that both parents are deceased. You may also want to make provisions for inheritance to your child, and details inheritance circumstances if you have a living trust. Grandparents may also wish to modify their asset dissemination.
  • Deaths or Incapacity: If someone you have named as a guardian for your children in the event of your death dies or becomes debilitated and is no longer able to provide adequate care, you need to revise your estate documents as soon as possible. You also need to revise as soon as possible in the event of death or incapacity of any of your named executors or beneficiaries.
  • Change in Career: If your employment status changes, you should look at your estate plan and determine if there are any necessary revisions to make. There may be modifications to consider, for example, if you are making significantly more or less income, if you are retiring, or if your job change involves relocation to a state with different laws to consider.
  • Change in Assets: If the value of your assets significantly changes, if you earn or inherit substantial wealth or assets, or your estate markedly decreases, it is an important time to look at revising your estate plan. You may want to revise the distribution of assets in your estate or make other necessary revisions.
  • Relocating: Laws are always evolving, and estate plans are not always recognized or valid in every state. If you relocate to a new state, it is imperative to learn your new state’s laws around taxes, probate, and estate planning, and to be sure your estate plan is in compliance.

Legal Representation:

Life is full of changes, many of which are exciting, some of which are upsetting, and most of which are full of emotion. Our attorneys are here to advise you appropriately and to relieve you of the complicated and confusing nature of estate planning revisions. We will help you to make the estate plan modifications that match your wishes, ensuring your plan remains in compliance with the ever changing laws.

Please contact us today for a consultation.

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