by WILLIAM B. HOWELL
1. Protect your spouse and children.
Only by putting into place the necessary and legally sufficient documents can a person appoint the chosen guardian for their minor children should both parents pass away before the children reach their majority. Assuring financial resources for your spouse and your children is only one of the benefits you will have.
2. Avoid delay in getting your property to your beneficiaries.
Property (including money) passing through probate is held in your probate estate until an order of the probate court releases the property. If you plan to pass your property at your death by a Will, probate is the required process for distributing your property, and it will take time, sometimes years. Probate can be avoided. A Living Trust is a solution for most people, for lifetime protection as well as handling your estate at your passing. No court is involved and no order is needed.
3. Are any extended family members dependent on you?
Do you have a disabled adult child? Without special planning, your death may end the essential support you have been providing for an elderly relative and/or a disabled adult child. Even worse, if that disabled adult child is receiving governmental benefits, and then receives an inheritance from you, that child may lose those benefits. Instead, you can put into place a special needs trust which designates such a financially dependent adult as beneficiary, and the trust will continue to provide for these special family members after your death.
4. What protection can you provide yourself and your family in the event of your own incapacity?
No one plans to have dementia, stroke, or a disabling auto accident. Those planning ahead put into place proper documents naming the person or persons of their own choice to manage their financial and medical needs when they cannot manage for themself. And the proper authority must also be given. Powers of attorney are often not honored. A Living Trust is ideal for disability planning.
The wise person also executes an Advance Health-Care Directive specifying whom they want to make health-care decisions for them if they are not able to do so and what end-of-life decisions they want to be made. The Advance Health-Care Directive also allows you to direct that you be kept pain-free in your last illness. But this document does not always work if you cannot speak up for yourself. In order to allow your family to communicate with your health care providers (your doctors and others) you will also need a HIPAA authorization to waive your federally imposed medical privacy restrictions.
5. Preserve the value of your estate by minimizing expenses of distribution.
Good planning can significantly reduce the expenses necessary to transfer your assets to your intended beneficiaries. Being prepared is a must to keep unnecessary expenses from reducing the value of your estate, both during your lifetime and at your death.
6. Appoint your personal representative of your estate.
At your death, someone must act for you. Hopefully, it will be someone you have chosen. A further benefit gained with a Living Trust is that your chosen successor trustee can act for you during your lifetime if you should be unable to act for yourself, not just after your death, all without court.
7. Provide a legacy of thoughtfulness to your family.
Good planning eases the burden for your surviving family. Times of grief are stressful and not conducive to good decisions about important financial matters. Take that burden off of them by having your wishes spelled out, so that all is simple, not complicated. Also consider preplanning for your funeral arrangements.
8. Protect a family business.
Planning allows you to put into place legal arrangements for the smooth transition of ownership and management of a family business. Not only will good estate planning help assure the continued good health of the business, but can protect those very important family relationships.
9. Eliminate or minimize death taxes.
Only advance planning by married couples can save the death tax exemption of the first spouse to die. If you are single, good estate planning can help minimize, or in some cases, completely eliminate death tax liability.
10. Support a favorite charity or your church.
Estate planning can carry out your chosen gifting program. It doesn’t have to be complicated. Many people leave something to their church, to Blair Batson Children’s Hospital, or other worthwhile entities. The charity benefits and you may well benefit in tax savings, too.
William B. Howell is a member of the National Academy of Elder Law Attorneys and practices law in Ridgeland.