While no one wants to think about death or disability, it’s important to think about an estate plan while you have the time and mind to legally establish your choices.
Our estate planning attorneys can help you with the important steps to take to protect yourself and your loved ones.
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Estate planning puts you in charge of your finances and frees your family any of the costs, delays and frustrations that they would otherwise encounter managing your affairs after your death or disability.
What decisions can I make in my estate plan?
Providing for incapacity
While you may have a will, that will only takes effect after you die. What if you become incapacitated or disabled? You won’t necessarily be able to continue managing your financial affairs. And while you may think that your spouse or adult children will be able to take on this responsibility, it may not actually be the case.
In order for anyone to be able to manage your finances, they have to first petition a court to declare you legally incompetent—an expensive, lengthy and stressful process that can be emotionally painful as well. And in the event that the court appoints the person you would have chosen, that person still has to show the court each year how he or she is spending and investing your money. All this has to happen simply to allow someone to pay your living expenses with your own funds.
By legally designating a person or persons you trust, you give them the authority to withdraw money from your bank accounts, pay your bills, take distributions from your IRAs, sell stocks or even refinance/sell your home. Even if you have designated a power of attorney, this may not be sufficient to ensure these tasks.
Avoiding “probate” (the courts) is one of the biggest advantages of having estate planning attorneys guide you in developing an estate plan to protect your assets. Because even if you leave your estate to your loved ones in your will, everything you own will pass through probate—a time-consuming and extensive process.
Probate courts can freeze assets for weeks or even months while trying to decide the proper outlook of your estate—forcing your survivors to apply to the probate court for the funds to pay living expenses at a time when they’re grieving your loss. If you want to make sure that your surviving family has access to funds to pay for their living expenses while your estate is being settled, you need to work with an estate planning attorney to avoid probate.
With proper planning on your part and the help of an estate planning attorney, you can make sure your assets pass quickly and inexpensively to your surviving family without having to go through the courts.
Providing for minor children
If you have minor children, they’re undoubtedly high on your mind when you consider your estate plans. If your children are young, you may want to consider designing a plan that allows your surviving spouse or partner to devote more time and attention to them, without the burden of working outside the home. If you believe your spouse might lack the experience or ability to handle financial and legal matters, you may also want to provide for special resources and education. In addition, you may want to discuss the possibility of both you and your spouse or partner dying simultaneously or within a short duration of each other.
If you have any of these concerns, consider drawing up a contingency plan for anyone you’d like to manage your assets, or a legal guardian you’d like to appoint to take care of your children. These need not be the same person. If you don’t decide these matters yourself, they will be decided in court.
Additionally, if you are leaving assets to your minor children, consider the way you’d like them to receive the assets—directly or in a trust, on what schedule of distribution, and based on which if any factors or incentives (for example, incentives based on education). This prevents your children from receiving substantial assets before they are mature enough to properly handle them.
Reducing death taxes
Many families are surprised at how much estate taxes and other costs can claim from a nest egg that has been built up over many years. This sort of unfortunate shock can be avoided if you plan for your death taxes with the help of an estate planning attorney.
After your death, the IRS will review your estate to make sure you don’t owe them the last tax you’ll ever pay: the federal estate tax. Whether you pay and how much you may pay depend entirely on the size of your assets and how your estate plan is structured. There are many strategies your estate tax attorney can use to reduce or eliminate your death taxes, but this process must be planned early in order to properly implement it.
If you want to make a gift to a charitable organization or cause before or after your death, you can provide for it in your estate plan as well. Depending on how you plan it, your giving plan may also allow you to receive a revenue stream for life, earn a higher yield on your investment or pay a reduced capital gains or estate tax.
Why should I hire an estate planning attorney?
Estate planning attorneys are experienced in the best ways to help you determine how your assets should be managed during your lifetime, and how to legally distribute them after your death.
A good attorney will also adjust your estate to minimize taxes and eliminates court costs and interference. He or she can create a legally binding document that ensures that you have control of your finances, taxes and plans.
An estate planning attorney will help you review your financial and family situation as well as your goals, and explain the different options available to you. Once your estate plan is in secure, you will have peace of mind knowing that you have provided for yourself and your family before the worst can happen.
The attorneys at Wilson, Reives & Silverman have extensive knowledge of North Carolina estate planning, and are here to provide you with trusted, effective legal counsel.