Estate Planning: Create A Plan Now For Yourself, Your Loved Ones, And Your Community
If you own anything, you have an estate. After your lifetime, your estate is settled; however you have planned for money and property to be left to your family, loved ones, and the charities you care about, like Hospice of Davidson County. In general terms, a will or living trust is the legal document that coordinates the distribution of your assets after you pass on.
Estate planning is for everyone.
It is not just for “retired” people. Unfortunately, you can’t predict how long you will live, and illness and accidents happen to people of all ages.
Estate planning is not just for “the wealthy,” although people who have built some wealth do often think more about how to preserve it. Good estate planning often means more to families with modest assets, because they can afford to lose the least.
Too many people don’t plan.
Individuals put off estate planning because they think they don’t own enough, they’re not old enough, they’re busy, think they have plenty of time, they’re confused and don’t know who can help them, or they just don’t want to think it. Then, when something happens to them, their families have to pick up the pieces.
If you don’t have a plan, the state has one for you, but you probably won’t like it.
If you die without an intentional estate plan, your assets will be distributed according to the probate laws of the state. For example, if you’re married and have children, the state could give your spouse half of your estate’s assets, and your children the other half. And the process can take months, and that’s assuming no other creditors or others challenge for part of the estate. There are any number of ways it could go, and if your spouse needs more than a fraction of your estate to survive, there is not a lot of recourse if a legally-binding plan, like a will, isn’t in place. Is that really the legacy you want to leave for your loved ones?
An estate plan begins with a will or living trust.
A will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your will must go through your state’s probate process before they can be distributed to your heirs. (If you own property in other states, your family will probably face multiple probates, each one according to the laws in that state.) The process varies greatly from state to state, but it can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. With rare exception, probate files are open to the public, and excluded heirs are encouraged to come forward and seek a share of your estate. In short, the court system, not your family, controls the process.
Not everything you own will go through probate. Jointly-owned property and assets that let you name a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, etc.) are not controlled by your will and usually will transfer to the new owner or beneficiary without probate. But there are many problems with joint ownership, and avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably insist on a guardianship until the child legally becomes an adult.
For these reasons, a revocable living trust is preferred by many families and professionals. It can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your love and values to your family and future generations.
Unlike a will, a trust doesn’t have to die with you. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit. Your trust can continue longer to provide for a loved one with special needs or to protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending.
A living trust is often more expensive initially than a will, but considering it can avoid court interference at incapacity and death, many people consider it to be a bargain.
Healthcare Proxy and Power of Attorney
Many people’s estate plans also include a healthcare proxy, which is commonly known as an advance directive.
An advance directive allows you to name someone to make medical decisions for you if you become incapacitated. If your former spouse is your healthcare proxy, their designation will be revoked upon your divorce becoming final. As soon as a divorce is considered, a new health care proxy should be executed.
As a service to the community, Hospice of Davidson County often offers Advanced Directive Services free of charge. Contact us for details.
Likewise, when someone has been named in a power of attorney role for you, this means they can make financial decisions on your behalf if you are unable to do so. If that person is your spouse and you later divorce, this power will be revoked once the divorce becomes final. Again, if your spouse is the person with this power, it will be important to name someone else in this role once you know you are divorcing.
Planning your estate will help you organize your records and correct titles and beneficiary designations
Would your family know where to find your financial records, titles, and insurance policies if something happened to you? What about usernames and passwords for online accounts? Planning your estate now will help you organize your records, locate titles and beneficiary designations, and find and correct errors.
Most people don’t give much thought to the wording they put on titles and beneficiary designations. You may have good intentions, but an innocent error can create all kinds of problems for your family at your disability and/or death. Beneficiary designations are often out-of-date or otherwise invalid. Naming the wrong beneficiary on your tax-deferred plan can lead to devastating tax consequences. It is much better for you to take the time to do this correctly now than for your family to pay an attorney to try to fix things later.
The best time to plan your estate is now!
None of us likes to think about our mortality or the possibility of being unable to make decisions for ourselves. This is exactly why so many families are caught off-guard and unprepared when incapacity or death does strike. Don’t wait.
Make an Impact Of A Lifetime
After Your Lifetime
Estate Plan Giving is Estate Plan Giving is exactly like it sounds, and it gives you the ability to leave a gift to Hospice of Davidson County through your will or trust.
Estate Plan Letter of Intent
Estate planning documents are written in broad legal terms. Some terms that you will commonly see in these documents include maintenance, support, health, and education. Eventually, your estate plan and the included wishes will need to be implemented. Since there can be numerous interpretations to these terms, a letter of intent can help provide clarification with additional context regarding what you want these terms to mean.
Estate Plan Gift Bequest Agreement
Estate Plan Giving is exactly like it sounds, and it gives you the ability to leave a gift to Hospice of Davidson County through your will or trust.
Your Estate Plan Gift provides the following benefits:
- You have the opportunity to make a major gift while preserving assets during your lifetime.
- You may realize a reduction in federal estate taxes.
- You have the opportunity to designate a gift to support a specific program or service offered by Hospice of Davidson County.
NOTE: THE INFORMATION PROVIDED ON THIS PAGE IS STRICTLY FOR EDUCATIONAL PURPOSES. IT IS IN NO WAY INTENDED TO REPLACE THE NEED FOR SOUND LEGAL COUNSEL. WHEN PREPARING A WILL, HEALTHCARE DIRECTIVES, POWER OF ATTORNEY, AND OTHER LEGAL DOCUMENTS, PLEASE DO SO UNDER THE DIRECTION OF PRACTICING ESTATE PLANNING ATTORNEY, OR COMPARABLE SERVICE RECOGNIZED BY THE STATE OF NORTH CAROLINA.