Crafting a comprehensive estate plan means more documents than simply a will. A comprehensive estate plan gives significantly more benefits, including avoiding probate court and determining how you will be cared for if you can’t make your own decisions. An experienced Columbia estate planning attorney can help you create an estate plan that is legally enforceable and tailored to your wishes and the needs of your beneficiaries.
Although some believe that an in-depth estate plan is only necessary for individuals with significant assets or who are nearing the end of their life, there are several benefits to creating an estate plan and creating it earlier in your life. A comprehensive estate plan can better protect you and your assets, and starting early can help it be more enforceable.
The Benefits of a Comprehensive Estate Plan
A comprehensive estate plan can be made up of several legal documents, including a last will and testament, one or several trusts, durable power of attorney, medical power of attorney, a living will, and medical directives. Depending on your unique situation and wishes, you may not need all of these documents, or you may need other unique documents. An attorney can help you review your circumstances and decide what is ideal for you.
There are several benefits to a comprehensive estate plan that a simple estate plan may not always offer. This includes:
- Protect and Preserve Your Estate
One of the greatest benefits of a comprehensive estate plan is that there are options to keep your estate out of probate court. Through the use of trusts and other tactics, you can keep your assets safe from the costly impact of probate court, including the potential for state or federal taxes. Some types of comprehensive estate planning can also limit your tax liabilities while you are still alive.
You also keep the assets in your estate and the individuals they are passed to private. A will is a public document, and probate is part of public record. You have complete control over the beneficiaries of your estate, and there is less likelihood of a successful will contest with comprehensive and legally valid estate planning.
- Provide For Your Own Well-Being
A comprehensive estate plan often includes powers of attorney and medical directives. Both of these sets of documents enable you to control over a part of your life you may otherwise have no control over. Although few people like to think about a time when they may become incapacitated, it does happen. It happens to many people as they reach the end of their life or from a sudden accident.
These legal documents enable you to list your wishes for what medical care you receive and where you receive it. They also enable you to put a professional or loved one you trust in charge of medical or financial decisions, ensuring you are effectively taken care of when you are incapacitated and cannot make these choices.
- Save Your Loved One’s Time and Money
Creating one or more trusts keeps your assets or entire estate out of probate, which provides significant benefits for your loved ones. In the probate process, assets are inventoried and distributed through a predefined court process. This can take several months up to years if your assets are complex or there are contests and disputes. A comprehensive estate plan can prevent your loved ones from dealing with this long process and prevent them from losing estate value to court costs.
Q: Why Do Many People Not Have an Estate Plan?
A: Many people have numerous reasons for avoiding the estate planning process. It can be stressful to consider due to it being potentially time-consuming or expensive. Many people also avoid it because they do not want to consider a time after their death or do not feel that it will be anytime soon. Unfortunately, surprises and accidents happen, and an estate plan provides not just for after your death but for your care while you are alive.
Q: What Are the Important Factors to Consider in Estate Planning?
A: There are several things to consider when crafting and revising your estate plan. Important factors include:
- Your beneficiaries’ needs, and if any of them have unique considerations such as medical needs or limitations on when they can receive funds
- The future changes in your life and how those changes will impact your estate plan
- The financial ability you have now and the financial ability you will have during your lifetime
- The cost of living and how that impacts your finances
- Whether you want your estate to avoid probate court
Q: What Are the Four Foundational Documents of an Estate Plan?
A: The exact documents in an estate plan vary based on the unique needs of an individual. The most common foundation documents in an estate plan include:
- A Will: A will allows you to name an executor for the estate, list the heirs for your assets, and name a guardian for minor children.
- Trusts: One or more trusts can list the beneficiaries of assets in your estate, name a trustee, and keep those assets out of probate court.
- Powers of Attorney: Durable and medical powers of attorney provide an individual you trust with the legal ability to make financial and medical choices on your behalf if you become incapacitated.
- Medical Directives: Medical directives provide your wishes and instructions for medical care if you are unable to make those decisions.
Q: When Should You Revisit and Possibly Revise Your Estate Plan?
A: Most professionals agree you should review your estate plan every 2 to 5 years. This is to determine if anything about your preferences has changed over time and to reflect them in a revision. You should also review your estate plan after any major life changes that could impact several aspects of an estate plan, such as the assets you have included in it, the individuals whom you named executors, beneficiaries, or power of attorney, or other major parts of the estate plan. Typically, major life changes include:
- Marriages and divorces
- Family additions or deaths in the family
- Business investments or ventures
Significant changes could lead to the plan being unenforceable if you do not revise it.
Protecting Your Interests And Your Beneficiaries’ Futures
There are other benefits to creating a comprehensive estate plan, including business risk management and limiting what creditors can claim from your estate. An estate planning attorney at Stange Law Firm can help you navigate an individualized estate plan.