Legal Law
Estate Planning: What to Think Before Meeting Your Lawyer

Estate Planning: What to Think Before Meeting Your Lawyer

In my estate planning practice, it is not uncommon to meet a new client who wants a prepared estate plan, but is a bit vague as to what should be included in that plan. Quite often, the initial conversation begins with the client saying something like, “I would like a will … or should I have a trust? Do I need anything else?” Actually, those are good questions to start a discussion.

Most people recognize that your estate plan should provide for the distribution of your assets after your death. That, of course, is an essential element of a succession plan, but there is more to consider in a well-designed plan. Before meeting with your attorney for the first time, you should also think about things like who you want to handle your affairs in the event you become incapacitated; if you want your doctor to keep you alive if you are near the point of death with little chance of recovery; who you want to have the authority to sign important legal documents for you if it is not available; and, who would like to raise their children if they die suddenly. There are a wide variety of personal circumstances that affect estate planning, but let me offer the following as items to consider before even meeting with an attorney to discuss your own estate plan.

Should you have a will or a trust?

This is usually one of the first questions clients ask during an initial meeting. Many know that a trust will prevent probate, but that is true only if the trust is properly financed, which means that all of your assets are transferred to the trust. However, not all estate plans require a trust, and it may not be necessary for you to incur the additional cost of having your attorney prepare a trust, when a will is suitable for your needs. And, contrary to what some people think, having a trust no Avoid inheritance taxes.

A trust may be the right option for you, if you are unlikely to acquire more assets in the next few years. However, what can often happen is that people establish a trust and subsequently acquire new assets that they forget to deposit in the trust. Then when they die, assets outside of the trust have to go through probate, thwarting the intention to establish a trust in the first place. So before you decide on a trust as the main element of your own estate plan, take some time to consider your future investment plans and major acquisitions.

There are a few other advantages of a living trust that could make it the right choice for you. For example, if you become incapacitated, your trustee will be able to step in and manage your assets without having to find a court-appointed conservator. In that sense, a trust document is more comprehensive and flexible than an ordinary will.

What else should I consider in my estate plan?

Estate planning isn’t just about deciding who gets your wealth when you die. It’s also about making decisions about what you want to happen if you become seriously ill or disabled.

Every estate plan must include an advance directive, which used to be called a living will. This document allows you to designate a health care representative to make health care decisions for you, including end-of-life decisions, when you are unable to do so.

Similarly, we recommend that you grant a durable power of attorney to a trusted family member or friend to allow your designated agent to manage your financial and business affairs when you are unavailable or incapacitated. A durable power of attorney remains in effect for as long as you are alive and must state that it will be effective even in the event of your disability.

What about my bank accounts, life insurance, and investment accounts?

Careful estate planning should include a review of all of your assets, including verifying the beneficiary designations you have listed in your retirement plan and regarding your investment and bank accounts. With such beneficiary designations, these assets will be transferred outside of the probate process to those persons you have previously designated as beneficiaries in these accounts. It is important that you review your beneficiary designations to ensure that your choice of beneficiaries is consistent with your current intentions regarding the disposition of your estate.

A thorough review of your portfolio and consideration of the issues outlined above before meeting with your estate planning attorney will allow you to get the maximum benefit from your meeting. It will also help your attorney focus his discussion with you on the aspects of the process that are most relevant to your goals and needs.

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