4estateplanning

In decades past when the term ‘estate planning’ was mentioned, what immediately came to mind for many was the issue of writing wills specifying the beneficiaries of one’s property in the event of one’s demise. While the creation of wills for the purpose of specifying what should happen to one’s property in the event of ones death is indeed still an integral part of estate planning, the term has grown over the years to include other aspects besides the financial estate.

Today, many people include health care directives, clauses to protect their businesses and clauses to minimize the inheritance taxation on the part of their survivors upon their death. Another important aspect of estate planning is planning for your family’s future (especially if they have young children) in the event of your death.

Estate Planning Considerations

The issue of care for children has become even more pertinent in estate planning today, as family structures become ever more complex – what with the adoptions, multiple marriages and divorces so commonplace in today’s world – and there is more of a need to explicitly state who takes care of one’s children should one die when they are still young.

Many people have long held the somehow mistaken notion that estate planning is meant for old wealthy people. In actual fact, everyone needs to take some steps in estate planning, because as we all know death is not something that happens to old people. Furthermore, some aspects of estate planning – like health care instructions – are critical to everyone as anyone can potentially find themselves permanently incapacitated at any time.

What usually happens in the cases where a person who has not undertaken estate planning explicitly outlining medical care instructions is that their loved ones (mostly out of guilt) find themselves forced to keep them (the person who didn’t undertake estate planning with medical care instructions) living on life support even when there is no chance of them ever leading a meaningful existence again.

Health care instructions can, therefore, help reduce the emotional burden that would be involved in making a decision to terminate your life in these types of circumstances. What you need to remember in these instances is that your continued stay on life support (without any chance of your meaningful existence) would cost money – probably the very money that was to take care of your family upon your death.

Benefits of Estate Planning

Estate planning has many benefits and is something everyone should urgently consider. When someone who has not utilized estate planning dies, the inheritance of their estate is left to the state – whose provisions (at least some of them) are typically far-drawn from what one would have preferred, especially with regard to who gets what assets from your estate.

Furthermore, when one has died without planning their estate, it can lead to bitter conflicts resulting in extensive involvement of the courts – often subjecting one’s survivors to further emotional anguish at a time when they are still coming to terms with their bereavement.

As mentioned in the introduction, estate planning also includes decisions on who is to take care of one’s children – in case one still has young children in need of care – in the event of their (parents) death. What this means is that, in the event of your death as a parent with young children, the decision of who is to bring them up from that point on may end up being the decision of the court, and your children could very easily be given someone you would not have given them to, including someone who has scores to settle with you – through your dear children.

This is a consideration which has made many people – even people without much in the way of property – take estate planning more seriously, if only for the welfare of their children. Estate planning can also reduce the taxation ones survivors are subjected to in the process of inheriting one’s estate.

Steps to Estate Planning

While estate planning varies from case to case, there are a number of steps considered essential in the process of estate planning. One of the most crucial steps in estate planning is writing a will, a legal document in which one states what they would like to happen to their property and family in the event of their death. While anyone is allowed by the law to create their own will on their own (provided in most cases that they have witnesses), it is considered prudent to involve a lawyer in one’s estate planning as estate planning is an undertaking that typically involves a lot of legal technicalities, which can quite easily result in the revocation of one’s will if not well handled.

Consequently, a class of attorneys called estate planning attorneys has evolved to help people with their estate planning. It has now almost become standard practice in many places for people undertaking estate planning to involve an estate planning attorney to ensure that the plans they come up with can withstand the test of law.

The involvement of an estate planning attorney can help you avoid some of the common mistakes made in estate planning, like disinheriting a spouse (which in some states could make your will nullified) or leaving too much to a spouse (where you also have children) and which could also lead to complications later. Naming the wrong executor or simply not having your survivors know where to find your will in the event of your death are other common mistakes you can make in your estate planning, and since estate planning attorneys deal with these things from day to day, they are likely to be aware of these potential pitfalls and point them out to you as part of their legal counsel to you.

Besides the creation of a will, other important steps in estate planning include the creation of a trust to manage one’s property in the event of one’s death and the acquisition of life insurance, which would provide some payment in the event of one’s death. The issue of the acquisition of life insurance becomes an estate planning issue when one looks at estate planning in the widest sense – as a process of planning for one’s legacy. The creation of a trust if properly undertaken can protect your businesses even in your death, and ensure their sustainable well being of your loved ones even on your death.

An estate plan, like other plans in life is not static and thus regular review is another important step in estate planning. Events in which a review of your estate plan becomes an absolute necessity include divorce, remarriage and adoption which potentially remove or add some beneficiaries. Inter-state movement is another event upon which you are advised to review your estate plan, as the laws governing inheritance and estates in the new state you move to are likely to be different from those of the state from which you are coming and in which you made your estate plan. Therefore you might find it necessary to seek the services of an estate planning lawyer based and practicing in your new state to check your estate plan for compliance with the rules governing estate planning in your new state.