Wills & Trusts

Estate planning is important for everyone, not just the wealthy, because it helps ensure that your assets, health care decisions, and final wishes are respected and managed according to your desires. Here are several key reasons why estate planning is essential for all individuals:

1. Control Over Assets and Distribution
   Estate planning allows you to decide how your assets will be distributed after your death. This can prevent disputes among family members and ensure that your possessions go to the people or causes you care about.
2. Minimizing Legal Complications
   Without an estate plan, your estate may go through a lengthy and expensive probate process. This can involve court proceedings to determine how your assets are distributed, leading to delays and unnecessary legal costs. Estate planning documents, such as a will or trust, can help streamline this process.
3. Healthcare Decisions
   Through documents like a living will or advance healthcare directive, you can specify your healthcare wishes in case you become incapacitated. This can include decisions about life support, organ donation, and other critical medical matters, ensuring that your preferences are respected and preventing family disputes.
4. Guardianship for Minor Children
   If you have young children, an estate plan allows you to designate a guardian to care for them if something happens to you. This ensures that your children will be raised by someone you trust, rather than leaving the decision up to the courts.
5. Protection for Loved Ones
   Estate planning can help protect vulnerable loved ones, such as elderly parents, minor children, or individuals with disabilities. You can set up trusts to manage their finances or appoint a trusted person to make decisions on their behalf if needed.
6. Tax Benefits and Financial Security
   Even if you’re not wealthy, estate planning can help reduce estate taxes, ensure that your heirs inherit more of your estate, and provide financial security for your family. Tools like trusts can protect assets from excessive taxes or creditors.
7. Peace of Mind
   Having an estate plan in place offers peace of mind, knowing that your affairs are in order and your loved ones will be cared for. It also reduces the emotional and financial burden on family members during a difficult time.
8. Avoiding State Law Determinations
   If you don’t have an estate plan, state laws will decide how your property is distributed upon your death. These laws may not align with your wishes, and it could mean that some assets go to unintended individuals.
9. Incapacity Planning
   Estate planning isn’t just about what happens after death; it also helps if you become incapacitated. Documents like powers of attorney can designate someone to make financial or medical decisions on your behalf if you’re unable to do so.

In short, estate planning is a way to ensure that your personal and financial matters are handled in the way that you want, regardless of your wealth. It provides security for you, your family, and your future, reducing potential legal and emotional challenges during an already difficult time.

If you don’t have an estate plan, several consequences can arise that may cause complications for your loved ones and your estate. Here’s a breakdown of what can happen:

A. Intestate Succession

• Without an estate plan (like a will or trust), your estate will be distributed according to the laws of your state, which is called intestate succession.
• The state will determine how your assets are divided, which may not align with your wishes. For example, your estate might go to relatives you didn’t intend to benefit, or it might not include loved ones like friends or charities.

B. Probate Process

• Your estate will likely go through probate, a court-supervised process to settle your debts and distribute assets.
• Probate can be time-consuming, costly, and stressful for your family. It often takes several months to years to complete, depending on the complexity of your estate.

C. No Control Over Guardianship of Minor Children

• If you have minor children and don’t have a will specifying guardianship, the court will decide who will take care of them. This can lead to a situation where someone you wouldn’t have chosen is appointed as guardian.
• This decision could also be delayed if there is disagreement among family members or no clear plan in place.

D. Increased Taxes

• Without strategic planning, your estate may be subject to higher estate taxes, reducing the amount your heirs receive.
• An estate plan can include strategies to minimize taxes and ensure more of your wealth is passed on to your loved ones.

E. Potential Family Disputes

• When there is no clear guidance, family members may fight over assets, which could lead to conflict, legal battles, and broken relationships.
• A will or trust can provide clarity and reduce the chance of disputes.

F. Inability to Plan for Healthcare and Financial Decisions

• Without documents like a living will, durable power of attorney, or healthcare proxy, you may not have the ability to specify who makes medical and financial decisions on your behalf if you’re incapacitated.
• In the absence of these documents, family members may have to go to court to gain the authority to make decisions for you.

G. No Asset Protection

• Certain estate planning strategies can protect your assets from creditors, lawsuits, or even divorces. Without these strategies, your assets may not be as protected.

H. Difficulty Managing Digital Assets

• If you don’t have a plan in place for your digital assets (like social media accounts, digital currencies, or online business accounts), your loved ones may struggle to manage or access these after your death.

I. Inability to Support Charitable Causes

• If you have charitable interests, without an estate plan, you may miss the opportunity to leave a legacy to your preferred causes or organizations.

J. Unintended Inheritance to the State

• In extreme cases, without any heirs or estate plan, some assets may escheat to the state if no beneficiaries can be located or identified.

Having an estate plan in place allows you to maintain control over your assets, ensure your wishes are followed, and help your family avoid unnecessary stress and costs. It’s a good idea to consult with Longstreet Elder Law to ensure your plan is comprehensive and legally sound.

A Will and a Living Trust are both estate planning tools that help manage and distribute your assets after you pass away. However, there are significant differences between the two in terms of how they function, when they take effect, and their respective benefits.

Will

• Definition: A Will is a legal document that outlines how your assets and property should be distributed after your death. It also names an executor who will carry out your wishes.
• Effective After Death: A Will only takes effect once you die. Until then, it has no legal power.
• Probate: Wills must go through probate, which is the legal process of validating the Will, paying off debts, and distributing assets. Probate can be time-consuming and costly, and it is a public process.
• Privacy: Since a Will goes through probate, its contents become public record, meaning anyone can access it.
• Cost: Generally, creating a Will is less expensive than setting up a Living Trust.
• Flexibility: A Will can be easily changed or revoked at any time before death, as long as you are mentally competent.
• Control After Death: A Will doesn’t allow you to control how your assets are managed after your death. It simply distributes them according to your instructions.

Living Trust

• Definition: A Living Trust is a legal document that places your assets into a trust during your lifetime, with instructions on how they should be managed and distributed after your death. It is often created to avoid probate.
• Effective During Life: A Living Trust takes effect as soon as it is created, and you can manage the assets in the trust during your lifetime. You can also modify or revoke it if needed.
• Avoids Probate: Assets in a Living Trust typically bypass probate, which can save time and money for your beneficiaries. The trust remains private, and assets are transferred directly to your beneficiaries without court involvement.
• Privacy: Unlike a Will, a Living Trust is not made public and remains private, as it does not go through probate.
• Cost: Creating a Living Trust can be more expensive than a Will because it often requires more legal work to set up, and the assets need to be transferred into the trust.
• Flexibility: A Living Trust can be amended or revoked during your lifetime, as long as you are mentally competent.
• Control After Death: A Living Trust allows for greater control over how your assets are managed after your death. It can also be structured to provide for long-term care of beneficiaries (for example, for minor children or individuals with special needs).

In many cases, people choose to have both a Will and a Living Trust to complement each other. For example, a Will can address any assets not transferred to the Living Trust or provide instructions for guardianship of minor children.

It’s important to review and update your estate plan regularly to ensure that it reflects your current wishes and circumstances. Here are some key times to update your estate plan:

• Major Life Events:
  • Marriage or Divorce: If you get married or divorced, you may need to update beneficiary designations, the distribution of assets, and your healthcare directives.
  • Birth of Children or Grandchildren: Add new dependents to your will or trust and revise guardianship designations.
  • Death of a Loved One: If someone named in your estate plan (such as a beneficiary or executor) passes away, you’ll want to replace them.
  • Changes in Financial Situation: If you experience a significant increase or decrease in assets, such as receiving a large inheritance, selling property, or starting a business, your plan should reflect these changes.
• Changes in the Law:
  • Estate planning laws can change, such as changes to tax laws or the estate tax exemption. Regular updates (every 3-5 years) can ensure that your plan remains tax-efficient and legally sound.
• Changes in Relationships or Wishes:
  • If your relationships change or your wishes evolve—such as new individuals you want to include or exclude from your plan—these should be updated in your documents.
• Health Changes:
  • If your health or the health of a loved one changes, you might need to update healthcare directives or powers of attorney.
• Changes in Business Ownership or Assets:
  • If you buy or sell major assets or change the structure of your business, it’s important to review and potentially modify your plan.

As a general guideline, it’s advisable to review your estate plan every 3-5 years to make sure it’s up to date. But significant life changes or legal developments may require more frequent updates. Regular reviews with Longstreet Elder Law ensure that your plan continues to meet your goals and complies with any changes in the law.

Creating an estate plan involves various costs, which can vary widely based on the complexity and specifics of your case. Legal fees can range from a few hundred dollars for simpler matters, such as powers of attorney, to several thousand dollars for more complicated issues, such as a living revocable trust.

If you’re concerned about legal fees, contact our team upfront. We can help you get a clearer idea of the financial commitment involved.

To ensure that your healthcare wishes are honored if you become incapacitated, you can take the following steps:

• Create an Advance Healthcare Directive: This document includes two important components:
  • Living Will: Specifies the types of medical treatments you would or would not want in specific situations, such as end-of-life care or life support.
  • Healthcare Power of Attorney (POA): Appoints a trusted person (your healthcare agent) to make medical decisions on your behalf if you’re unable to do so. This person should be someone who understands and respects your wishes.
• Discuss Your Wishes: Have open and detailed conversations with your healthcare agent, family members, and your doctor about your healthcare preferences. Make sure they understand your values, goals, and specific decisions for different health scenarios.
• Review and Update Documents Regularly: As life circumstances and preferences change, it’s important to review and update your healthcare directives regularly. This ensures that the information remains accurate and relevant.
• Provide Copies to Key Individuals: Share copies of your advance healthcare directive and POA with your healthcare
  provider, the person you’ve designated as your healthcare agent, family members, and other key individuals. Keeping these documents accessible and updated will help ensure your wishes are followed in a crisis.
• Register Your Directive: Some states offer a registry where you can store your healthcare directives electronically. This can make it easier for healthcare providers to access your documents in an emergency.

By contacting our estate planning team and taking these steps, you can significantly improve the likelihood that your healthcare wishes will be honored if you are incapacitated.