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An estate is something that is under your authority or anything that you own. It includes all of your investments and your assets, such as your house, stocks, jewellery, money, and cars. Have you ever thought about what happens when you die? Who gets your properties? This is where estate planning comes in. Your estate planning lawyer deals with the paperwork to secure your will and trusts. Estate planning is not for the rich only; it is for everyone who owns assets and wishes to leave them to someone.
Estate planning lawyers have an in-depth understanding of the estate laws and they help you set up wills so that in the event of your death, your beneficiaries receive what you want for them. An estate planning lawyer can also help you cut through red tape and save money on taxes. Additionally, the estate planning lawyer imparts you with helpful advice and guides you during the entire process to keep you informed.
Here are some tasks in which an estate planning lawyer can assist you:
You must protect your property during your lifetime and after your death. Estate planning is the best way to make sure your property goes to loved ones. In some cases, the property can be the only source of survival for the deceased’s family. If you don’t set up a will after an unexpected death, the court will do it for you.
The estate planning lawyer will bill you on an hourly or flat-fee basis, depending on the size of your firm and the area in which you live. As document processing takes time, the estate attorney charges a flat fee. You can hire an estate planning lawyer on an hourly basis to maintain your estate and handle your disputes when necessary. Ideally, you should hire them on a flat fee basis because it does not involve a commission fee.
In the end, if some member claims they are not designated as a beneficiary, then they have the right to contest the estate of a person who has died. If you are also one of the beneficiaries of a will that is being contested, it is recommended that you involve an estate planning lawyer as soon as possible. Such lawsuits can leave all beneficiaries a little worse off and, if not taken care of, would quickly drain the estate funds.
When you hear the word “estate”, sprawling grounds and mansions may come to mind. And you’ll think of luxurious cars and stocks in the top companies. However, estates are not limited to the wealthy. Everyone owns the estate, the money, car, and house, or any other asset that you hold in your possession, as your property is your estate.
Passing on your possessions to your loved ones is the basis of establishing a formal estate plan. The legal documents should be taken care of as soon as possible. This is a vital step that ensures your family will have financial security and peace of mind after you pass away.
So, let’s get into the details of what an estate plan is and what its benefits are.
An estate plan is a collection of legal documents that protect your possessions and specify how they’ll be handed down when you pass away. It documents your wishes and the transfer of responsibilities to the loved ones in your absence.
The estate plan can include: How do you wish to distribute the cash among the family members? Who gets the guardianship of your children? Who executes the will and oversees the estate plan processing? Who has the power of attorney to make financial decisions in your absence? Who would pay the bills and taxes or take care of other legal or business matters? Who would make the medical decisions for your children? How would you like to be treated after death and what are your end-of-life preferences? Also, when will the assets be distributed?
Protect your assets for the benefit of your kin or heirs through an estate plan. An estate plan preserves the value of your assets while minimizing the wait time for disbursement and helps ensure the legacy you envisioned is carried out.
An estate plan lets you decide who receives your belongings. By creating a will, you basically name your assets, beneficiaries, and an executor who will distribute the estate according to your wishes.
An estate plan helps you choose who will make your decisions in your absence. An estate plan usually contains a durable power of attorney form and a healthcare proxy form—two vital legal documents that ensure the financial and medical safety of your children. A durable power of attorney may appoint a trusted relative or friend to manage your legal and financial affairs in the event of your death. You might have to include information related to your investment and pension funds, such as IRAs, 401(k) plans, and insurance policies.
The process is straightforward. You begin by calculating your worth by creating a list of all of your financial assets, personal property, and documented liabilities. Then, you get advice from a financial professional to refer you to a qualified estate planning attorney.
You determine who you want to designate as your beneficiaries or if you want to update the list of beneficiaries. The last one is to keep visiting the estate plan to ensure it is up-to-date and contains proper instructions for estate transfer. You might also want to add or remove beneficiaries as time progresses. Therefore, it is vital to revisit your estate plan once or twice a year.
Life insurance and annuities are exceptionally important when it comes to estate planning. It provides a source of income for your family and pays off expenses or taxes at your funeral. If you have mortgaged the house, you live in, the life insurance pays off the mortgage so that your surviving children and spouse can live peacefully. Annuities are sometimes directly available to the beneficiaries without any delay if the beneficiary is named and there aren’t any other legal problems.
The biggest advantage of hiring an estate planning lawyer is that it helps you save money and time on the probate process. It also helps reduce tax liabilities. An estate planning lawyer can help you in several ways.
There are several ways you can make a will by yourself. However, there are some problems that you may encounter while making a DIY will. Wills, especially the online templates, are not one-size-fits-all. There are certain criteria for writing a will, and unless you do extensive research, it can be difficult to write it correctly and specifically. Without following the proper rules, your will may not turn out right and it can cause litigation and problems for the beneficiaries.
You can meet with an estate planning lawyer to help make the entire process easier. Getting an estate planning attorney can help write down all the finer details about your will helping reduce any loopholes or gaps that can be challenged in court.
Estate planning attorneys are experienced individuals who use the right resources and methods to distribute assets to their respective inheritors. Usually, these lawyers are unbiased third-party representatives that try to understand your case before offering the best advice in the given scenario that also ensures the best outcome for you.
The court follows a process called probate to transfer the deceased’s estate to their respective inheritors. Probate can be extremely expensive and time-consuming. In certain situations, the entire probate process can take almost 2 years to transfer the property to the heirs.
The entire procedure is public and can be draining for most families who are already suffering from the loss of a loved one. Also, the probate allows anyone who goes to the court and asks for copies of the will to obtain it along with other legal documents.
Fortunately, probate is not necessary when the estate is not in a trust. You can avoid probate if all the assets are designated to the beneficiaries. For small estates under $50,000 in real property but less than $150,000 in the total value of your property, you can use a Small Estate Affidavit for transferring an estate to the legal heirs.
But, when it comes to a small estate affidavit, some entities may not accept it and force your beneficiaries to either:
Probate lawyers can help you avoid probate completely and ensure that all assets are represented correctly to avoid such problems later.
If the probate process is unavoidable, the attorney can prepare your heirs for the probate process and make the process easier for them. The attorney navigates through the legal system to ensure the best outcome for your heirs and beneficiaries in every situation.
The probate laws constantly get updated, and if you had planned your estate a while ago, some new laws that were set in place later might affect the estate plan negatively. Estate planning attorneys are up-to-date on every law and can help you realize how the new laws will affect your estate plan. Therefore, the estate plan can be kept up-to-date only if you involve an estate planning lawyer.
An estate planning lawyer can help you designate a person according to your wishes, who’ll carry out your health wishes. A family member or close friend who is best suited to this role will be selected for this. Sometimes, the person who you’d want to carry out your medical wishes is removed from the situation as other family members take over. The estate planning attorney will ensure that the person you designate takes this role, and the attorney acts as a third party to guide you on who might be best to serve in this role.
The estate plan includes everything. Its main elements are your will, list of beneficiaries, durable power of attorney (should you become incapacitated), advance medical directive, life insurance, and a trust. Having a well-rounded estate plan ensures that your loved ones won’t be jumping through hoops after your death. A knowledgeable estate planning attorney also imparts you with the right knowledge and advice on how you can optimize the process and guarantee a safe and secure future for your loved ones.
With the crafting of the correct documents, you can ensure that your legacy is carried on and carry out your final wishes, funeral arrangements, and family traditions and values.
Estate plans can change over time. Because people go through a divorce, the birth of a new child, remarriage, changes in assets, health complications, and even move out of the state sometimes. All of these life changes mean the will should be modified and updated regularly. Whatever the situation, you should be ready to update the estate plan.
Throughout life, we go through changes, and even probate laws change from time to time. Amending the will may not be the first thing you’d want to do, in an unfortunate event such as the loss of a loved one, or when you welcome a baby or move out of the country. But it is important to update the estate plan, no matter how busy you are, to ensure your loved ones enjoy the same financial freedom and lifestyle after you pass away.
The cost of an estate planning lawyer depends on many factors, including the experience of the attorney, where they are located, and the complexity of work involved. Estate planning lawyers usually set up estate planning fees in two different ways:
The first one is the hourly rate, which will depend upon the location, experience, and size of the law firm. Or the flat fee rate, which is a one-time fee that the attorney will charge for all estate planning services. Usually, an attorney will know the average time it will take to prepare your documents. They can charge a flat rate, so you don’t have to pay hourly fees because the process takes longer.
Hourly fees can be financially exhausting, and attorneys bill their clients in six-minute sessions.
On the contrary, a flat fee structure is not only relaxed and comfortable, it lets you know how much the entire collaboration will cost before you begin. If your attorney chooses to charge you a flat fee, you need to understand that you may have to cough up some more money for court filing, documentation, and other relevant legal fees.
When you think of an estate plan, you might think of the ultra-wealthy, but estate planning is not just for the rich. Everyone, regardless of their family dynamics or financial status, needs an estate plan. An estate plan is a collection of documents that specify how you want your assets distributed after you pass away. According to a study published by Caring.com, only 42% of American adults have estate planning documents in place, such as wills or living trusts.
Estate planning is crucial, regardless of your age, wealth, or relationship status. It lets you leave your possessions to someone you love. For some people, it might seem morbid to discuss end-of-life planning, but no matter how hard it is to discuss, it can be devastating for your family if you pass away without having an estate plan in place. If the estate plan is not a part of your financial plan, you’ll need to incorporate it as soon as possible. Here is why you need to hire an estate planning lawyer or a wealth advisor to document your death wishes:
Estate plans are not for death-only situations. If you become incapacitated or unable to make decisions for yourself, the estate plan will help protect your assets and choose the person who can make financial and health decisions for you. Your cash flow needs will change as you lead up to retirement and beyond.
You’ll have to make certain decisions, such as having a healthcare proxy, insurance plans, and much more. Giving power of attorney for medical and financial decisions on your behalf to a person of your choice is crucial to safeguarding your assets and caring for your children. Therefore, you should sit down with an estate planning attorney to chalk out an estate plan that speaks for you when you are unable to speak for yourself.
If you pass away without setting up an estate plan, the state you reside in decides how your assets will be distributed. There have been instances when families have lost everything they built together after the passing away of a parent. Proper documentation can save your family members from future frustration and ensure that your assets are distributed in the way you intended.
You should routinely review your beneficiaries and investment accounts to make sure everything is modified and up-to-date. The probate laws also change from time to time, and they can have a positive or negative impact on your estate plan. Therefore, it is advisable to make sure everything that you own is included in your will or trust that clearly defines who gets what after your death.
If your family has accumulated a substantial amount of wealth, you also have to think about how you can minimize taxes upon the transfer of the property. An estate planning lawyer can help you develop a tax-efficient process that will transfer your assets to the beneficiaries as smoothly as possible.
You’ll have to consider three types of taxes that might apply to your property when you pass away: the estate tax, gift tax, and generation-skipping transfer tax. The IRS limits how much money can be transferred without paying taxes. A sound estate plan should outline how the wealth transfer strategy will attempt to minimize taxes so that most of your estate remains intact and goes to your family.
You might have some philanthropic wishes after you die. To be remembered after you die, your estate plan can incorporate how you wish to leave your money to philanthropic organizations. For several people, the philanthropic intentions are to develop a plan to ensure that such goals are implemented into the future. You might want to create a family foundation, set up a charitable trust, or support organizations that work for a cause you feel is right. The sooner you set up an estate plan, the better you can convert your philanthropic intentions after death into a documented form.
Wealthier individuals are more susceptible to frivolous lawsuits that attempt to capitalize on their hard-earned wealth. Your assets can get challenged several times during your lifetime and even after your death. An estate plan can help you avoid such problems by removing your name from the possessions and properties and putting them in a legal vehicle such as a trust or a limited liability entity. Insurance is also critical for safeguarding your wealth. The insurance protects the basic areas, including a variety of legal challenges.
Every family has its own set of goals that they hope to achieve by passing on their wealth and legacy. It instills and preserves the family’s values throughout generations. Usually, families are successful in developing a strategy that provides age-appropriate transparency, creates a welcoming learning environment, and encourages opportunities for involvement.
You can talk to your children about working with an advisor and having an open conversation with them about the family’s wealth discussion. This can help prepare your family emotionally for the future and avoid conflict younger generations may get into due to the distribution of wealth.
Estate planning lawyers craft estate plans that have minimal problems. If you have the time on your hands to craft an estate plan, then probably there is no need for you to hire an estate planning attorney. In cases where the estate plan is not complex for example, does not have unorthodox beneficiaries or there is no need for taxes, you may not need an estate planning attorney then.
However, when creating an estate plan, an individual does run the risk of creating a document that may not be valid. In such situations, you should let an estate planning lawyer take a look at it.
The majority of the estate planning documents are not complex meaning that they can be prepared without the assistance of an estate planning lawyer. Preparing an estate plan on your own allows you to look into all the available options without any influence from an attorney.
A rule of thumb to decide whether you should hire a lawyer or not is to think about whether your estate plan could hold in court. For instance, if you keep your spouse out of your estate plan or a will. Retaining a lawyer means that you’ll be charged an hourly or flat fee. But the fee is justifiable because you’ll be dealing with valuable and complex assets.
Choosing an estate planning lawyer is another important decision that you’ll have to make after you have finally decided how your wealth will be distributed. An estate planning lawyer is a specialist who deals with estate issues arising from taxes, government benefits, or foreign national beneficiaries.
Besides estate taxes, estate planning lawyers also have deep knowledge of the laws pertaining to trusts that change now and then. Therefore, your estate planning lawyer will keep you updated on the exact requirement of the federal and state laws. When you’re dealing with a straightforward estate plan without any complexities, you can drive your legal costs down by hiring an attorney who may not be a specialist.
You might also want to consider the personality of the lawyer before you begin the process. The estate planning lawyer is someone you’ll be going to from time to time to get legal advice, update the will, and incorporate changes. It is recommended to choose a person who gets along with you well. The lawyers should show signs of compassion and be able to develop a good understanding of your needs.
When you meet your estate planning lawyers, the meeting should completely eliminate all the stress regarding your case rather than adding to it. So, ask your friends and family members if you can get a referral or go to a lawyer who you trust to advise you. You can also read reviews and ratings of law firms before you start working with them to make sure that your needs will be met emotionally.
Your lawyer, who you often get help with regarding different legal matters, can refer you to other lawyers. Instead of going to a generic bar association, go to a lawyer or a law firm that has a reputation and use a referral. Even if you trust the referral source blindly, you should only consider working with an attorney that makes you feel comfortable communicating with them. Also, ensure they have the expertise and ability to solve your problems.
To anticipate costs, you should always mention or document the legal fees before the estate planning lawyer starts to provide legal service. Ask if they charge a flat fee or an hourly fee. If they offer both, choose the one that suits you and estimate the time would be spending with the attorney. Clearing up confusion and setting rules beforehand can help you carry out the processes smoothly and form a good relationship with the lawyer.
Even if you have already created an estate plan document, you might feel anxious and wonder if it is valid. To ease your mind, you can contact an estate planning lawyer. Getting an estate planning lawyer to review your legal documents can give you peace of mind.
If estate planning is too hard to take care of on your own, you should involve an attorney. Some attorneys may not take the case if they believe that the estate plan may pose a risk of malpractice, jeopardizing their career and reputation.
In such situations, it is always ideal to get the attorney to carry out the entire process for you. To save yourself the hassle and get the best out of your collaboration, it is recommended to talk to the attorney in detail before hiring one.
Estate planning is a complex and emotional process, but an important one that should be started as soon as possible. The earlier you get started, the better. You can prepare your family for the future by facing challenging situations and teaching them how to deal with them.
Setting up an estate plan will ensure that your estate will be distributed according to your wishes and your family won’t have to jump through hoops to do that. Before making these major decisions, you can also seek the advice of an estate planning lawyer.
Getting an estate planning attorney to make your estate plan will also remove any uncertainties pertaining to wealth transfer or the transferring of assets to the next generation. So, choose a trusted firm that has substantial experience in estate planning and understands the legal challenges surrounding wealth transfers and asset preservation.