What Is An Estate Plan?
There are probably a lot of questions you have. Such as:
- Why does anyone need a will?
- Do I need a trust?
- Would it help me if I had a trust?
- How would I know if the benefits of a trust for me will exceed the costs?
- What is a trust anyway?
- Are trusts just for “rich people”?
- If I am incapacitated, (in a coma temporarily or temporarily insane for example), how are my healthcare and financial decisions made?
- How do I avoid a future family fight over my legacy?
This is the 10,000 feet overview of estate planning. This subject, estate planning, is so important it’s often the ignored and often a sensitive topic and difficult to talk about; it’s often hard to understand. When a person realizes that they need to write his or her will, that is a moment of tacit acceptance of one’s own mortality. That’s not always easy to do. A last will and testament is a plan for what happens if a person dies or if a person is incapacitated temporarily or permanently. I said this often and I heard this said more often than I’ve said it: “What happens if I get hit by the bus tomorrow?” That’s the question the estate plan answers.
Why Does Anyone Need a Will?
Any person who owns property or has some money or possesses anything of value eventually would want to give a legacy of their property, money and possessions to their surviving family or friends, giving their surviving beneficiaries a legacy. Sometimes when giving a legacy through a will to a friend(s) or charity(ies), it is especially important to “cut out” children or other related family members; doing that can be tricky and the skills of an estate planner are often employed. Estate planners exclusively are lawyers. Anyone can draft their own will. Drafting a will for hire for someone else can be the unauthorized practice of law, but buying a will kit or hiring a will service are both fine.
Many estate disputes and will contests originate from badly written wills or the lack of adequate estate planning before a death occurred. I speculate that most flawed wills, bad planning, or lack of planning are the result of either fear of death or parsimony. Either with or without a will, when a person passes away, there will be an estate plan provided by the government known as intestacy, if the deceased had no will, or if there is a will, the estate plan is controlled by the plan in the will. Then again, if a person owns no property, no money, and has nothing of value, that could be a situation where no will is needed. Or not. Again, only lawyers are qualified to give a legal opinion about that and hopefully such legal opinion would come from an estate planning attorney.
Do You Need a Trust?
Sometimes a trust may better serve a person’s estate planning needs than a will could. If someone wants to avoid probate or wants complete privacy in the handling of their estate affairs, then a trust, as a person’s main estate planning instrument, is often a better option than a will. Trusts are not just for “rich people.” There are many kinds of Trusts as some trusts have special purposes for supporting children with special needs, benefitting orphaned children or holding and operating a business. Trusts cost more than wills, are more complicated, and take some degree of management during lifetime. Wills do not become “active” documents until after the signer of the will dies.
If you get hit by the bus and you don’t die, the chances are good you would be incapacitated for a bit. If you have a will in this case it doesn’t matter - because you are alive, hypothetically. But if you don’t recover for six months, there is only one good way to have your financial and healthcare decisions made for you during that six months that you are “out of commission.” A financial power of attorney (FPOA) allows someone you trust as “agent” to make financial decisions for you during the time when you are incapacitated. A healthcare advance directive allows someone you trust as “agent” to make healthcare decisions for you during the time when you are incapacitated. Some states call it a living will, others: health care proxy, but in Georgia the proper name for this healthcare document is advance directive for healthcare (ADHC).
If on the other hand, you were hit by a bus and incapacitated for six months and you did not have the healthcare documents and the financial documents for incapacity, Then a guardianship and conservatorship might be needed which are typically exponentially more costly and stressful to the family than simply establishing the FPOA and ADHC before incapacity ever occurs.
A basic will, a financial document FPOA, and a healthcare document ADHC, is what most people need to deal with death or incapacity. Sometimes trusts are better in some circumstances. In any case, it’s always best to get an estate plan with specifically written objectives that meet your estate planning goals. Any attorney or will service can help produce a will or estate plan that might work. An attorney who specifically designs their estate practice to handle wills and trusts, known as a “trusts & estates” attorney, can help produce a will or estate plan that has the lowest chance of a will contest and the highest chance of working exactly as the will-signer planned. Contact us today to learn more or schedule your appointment today!