Estate Planning

What is estate planning?

Why is estate planning important for me?

What does my estate include?

How do I name a guardian for my children?

What estate planning documents should I have?

Q: What is estate planning?

Proper estate planning should cover your whole lifespan. You may plan for yourself and your loved ones, without giving up control of your affairs while you are alive and well.
You also may provide clear instructions in the event of your disability, to ensure that all needs are met and your wishes are carried out. On the personal side, a good estate plan should include directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you know and trust would do that for you, knowing when you would want them to authorize extraordinary measures and when you would prefer they pull the plug.
Upon your death, your plan also should allow for efficient and effective settlement, passing "what you have, to whom you want, when you want, the way you want". In the United States, any competent adult has the right to choose the manner in which his or her assets are distributed after death. The main exception to this general rule is a spousal right of election which prevents the complete disinheritance of a spouse in most states. A proper estate plan also involves strategies to minimize potential estate taxes and settlement costs as well as to coordinate what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event of death.

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Q: Why is estate planning important for me?

Sadly, many families don’t do proper estate planning because they don’t believe they have enough to bother, or they believe that their family can just come in and divide their assets by themselves.  However, if you don’t make proper legal arrangements for the settlement of your affairs after your passing, the state’s laws will dictate what must be done. This often results in an unnecessarily prolonged and costly process. It also often results in the family squabbles, assets ending up in the wrong hands, and liability for estate taxes that could have been avoided.
Specifically, if you die without proper planning, the transfer of your assets may be accomplished through court-supervised proceedings called probate that generally take at least six months and typically take a year or more. These public proceedings are expensive and time-consuming in nature. Your assets and affairs may be tied up for months. Even worse, your failure to outline your intentions through proper estate planning can tear apart your family. People often try to out-maneuver each other to be appointed to handle the estate, and it is not uncommon for bitter family feuds to ensue over modest sums of money or a family heirloom.

Advance planning also is important to avoid a so-called "living probate" or guardianship in the event of your disability.

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Q: What does my estate include?

Your estate is simply everything you own, anywhere in the world, such as:

  • Your home or any other real estate in which you have an ownership interest
  • Your vehicles and any other tangible personal property
  • Any business interests you may own
  • Any banking, investment or other financial accounts you own
  • Your share of any joint accounts
  • The full value of your retirement assets such as IRA and 401k plans
  • Any life insurance policies you own or their proceeds
  • Any property owned by a trust over which you have a significant control

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Q: How do I name a guardian for my children?

If you have children under the age of eighteen, you should designate a person or persons to be appointed legal guardian over their person and property. Except in unusual cases, a surviving parent automatically serves as their minor child's sole guardian. This is true even if others have been named by you in your estate planning documents to serve as guardian. You nonetheless should name someone to serve as guardian in the event that no parent is able to finish raising your child, and you should name at least one alternate guardian in case the primary guardian cannot serve or is not appointed by the court. 

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Q: What estate planning documents should I have?

A comprehensive estate plan should include the following documents, prepared by an attorney based on in-depth counseling, taking into account your particular family and financial situation:

A Living Trust may hold legal title to and provide a framework to manage your property. You are the Trustee and beneficiary of your Trust during your lifetime. If you are married, your spouse also may be a Trustee and beneficiary as well. In fact, many married couples have a joint Trust rather than separate Trusts. In any event, you also designate successor Trustees to carry out your instructions as you have provided in case of incapacity or death. These instructions for passing your estate may include the typical "who gets what" provisions of a Will, and they may provide for long term management for beneficiaries. A typical Living Trust becomes effective immediately and is "revocable", allowing you to make changes and even to terminate it. One of the great benefits of a properly funded Living Trust is that it will avoid or minimize the expense, delays and publicity associated with probate.

If you have a Living Trust based estate plan, you also need a Pour-Over Will.  Its function is to "pour" into your Trust any assets which are not already in the Trust, so they are ultimately managed and distributed according to the terms of your Trust. It also is used to invalidate any Wills which you previously may have executed, and it will enable you to name a Guardian for minor children. 

A Will, also referred to as a "Last Will and Testament", only becomes effective upon your death, and only after it is admitted by a probate court. It is primarily designed to name your Executor, to be responsible for settling your estate under court supervision, and to establish your wishes with respect to the distribution of your assets when creditors have been paid and probate is over. If you have minor children, you also should name primary and alternate Guardians for them.

A Durable Power of Attorney names an Agent to carry on your property and financial affairs in the event that you become disabled. Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend.  Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a Guardian or Conservator appointed to make decisions for you when you are disabled.  This guardianship process is expensive, time-consuming, and emotionally draining for the family.

You also may create a Durable Power of Attorney for Health Care to appoint someone you trust to make health care decisions for you if you are no longer able to make them yourself. You may give your health care Agent detailed instructions to follow with respect to various situations or treatments. Your Agent can then ensure that health care professionals follow your wishes.  Hospitals, doctors and other health care providers must follow your Agent's decisions as if they were your own. 

A Living Will informs others of your wishes regarding "pulling the plug" should you become terminally ill or permanently unconscious. Almost all states have instituted living will laws to protect a patient's right to refuse medical treatment. Even if you receive medical care in a state without living will laws, this document is useful to a court trying to decide what an incapacitated patient would want. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity. 

The 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits the release of your protected medical information to anyone unless authorized by you or by law. It therefore is advisable to have a comprehensive HIPAA Authorization Form that allows the release of such information to your Agents, your successor Trustees, your close family members and perhaps other people. Some medical providers have refused to release information, even to spouses and adult children named as health care Agents, on the grounds that HIPAA prohibits such releases.

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Ward Legal Group PC is an estate planning and elder law firm serving all of New Hampshire and Vermont, including Keene and the nearby areas of Peterborough, Walpole, Brattleboro, Wilmington and Bellows Falls.

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