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Durable Financial Power of Attorney - Why You Might Need One
Durable Financial Power of Attorney - Why You Might Need One
October 9, 2024
At THE EDWARDS' LAW OFFICES, we frequently hear from clients who want to ensure that their financial affairs will be in order if something unexpected happens. One of the most powerful tools to help with this is a Durable Financial Power of Attorney (DFPOA).
What is a Durable Financial Power of Attorney?
What is a Durable Financial Power of Attorney?
A DFPOA is a legal document that allows you to appoint a trusted person—called an agent or attorney-in-fact—to manage your financial affairs. The key feature of a durable power of attorney is that it remains effective even if you become incapacitated or unable to make decisions on your own.
What Can Your Agent Do Under a DFPOA?
What Can Your Agent Do Under a DFPOA?
Once activated, your agent can handle a wide range of financial matters on your behalf, including but not limited to:
Accessing and managing bank accounts
Paying your bills, rent, or mortgage
Filing your taxes and managing your retirement accounts
Overseeing investment portfolios and real estate transactions
Making legal claims or handling insurance matters on your behalf
Without this document in place, your family may face significant delays or even court proceedings, i.e., guardianship or conservatorship, to gain control over your finances if you become incapacitated.
Why Might You Need a DFPOA?
Why Might You Need a DFPOA?
Life is full of uncertainties. Having a DFPOA ensures that someone you trust can make financial decisions for you if you are unable to do so. Here are some common situations where a DFPOA can be crucial:
Incapacity Due to Illness or Accident
Suppose you're in an accident or suffer from an illness that leaves you unable to manage your financial affairs. In that case, your agent can step in immediately to keep everything running smoothly.
Avoiding Costly Court Proceedings
Without a DFPOA, your family may have to go through a lengthy and expensive court process to be appointed as your financial guardian or conservator. A DFPOA can help avoid this by giving your agent immediate authority to act on your behalf.
Managing Long-Term Financial Obligations
If you expect to travel, experience declining health, or want peace of mind that someone can handle your financial responsibilities, a DFPOA can ensure continuity in paying bills, managing investments, and meeting ongoing obligations.
Preventing Financial Exploitation
By choosing your agent wisely, you can protect yourself from financial exploitation or fraud that may target vulnerable individuals during periods of incapacity. With a DFPOA, you control who manages your money.
When Should You Create a DFPOA?
When Should You Create a DFPOA?
It's important to establish a DFPOA while you're still in good health and have the mental capacity to make clear decisions. Waiting until a crisis occurs may be too late. A DFPOA is often a critical part of an overall estate plan, working together with other documents like your will or trust.
Take Action Today
Take Action Today
At The Edwards' Law Offices, we believe that a comprehensive estate plan includes preparing for both life and death. If you’re ready to take the next step in protecting yourself and your family, we’re here to help. Contact us for a "free consultation" to discuss how a Durable Financial Power of Attorney fits into your overall estate plan.
/s/ Benjamin F. Edwards
Estate Planning Attorney
The Edwards' Law Offices
Serving Illinois & Missouri
______________________________________________________________________________________________
Notice. See the disclaimer statement below.
The Importance of Removing a Deceased Joint Tenant's Name
From Your Deed
September 19, 2024 Newsletter - Vol. 2
When it comes to estate planning and property ownership, holding property as joint tenants with the right of survivorship is a common way to ensure the smooth transfer of assets upon the death of a co-owner. However, after one of the joint tenants passes away, there’s an important step that often gets overlooked: removing the deceased tenant’s name from the deed. While this may seem like a small detail, failing to take action can lead to a range of legal and financial complications down the road.
In this newsletter, we’ll discuss why it’s crucial to remove a deceased joint tenant’s name from a deed and how doing so protects your property rights and estate plan.
Ensuring Clear Ownership
Ensuring Clear Ownership
When property is held in joint tenancy, the right of survivorship means that the surviving tenant(s) automatically inherit the deceased tenant’s share of the property. However, until the deceased tenant’s name is legally removed from the deed, public records will continue to reflect them as a co-owner of the property. This can create confusion about who actually owns the property and may delay or complicate future transactions, such as selling or refinancing the home.
By removing the deceased tenant’s name from the deed, you ensure that the property’s ownership is clear and legally documented. This avoids potential disputes and makes it easier to manage the property moving forward.
Avoiding Legal Issues
Avoiding Legal Issues
If the name of a deceased joint tenant remains on the deed, it could lead to legal issues in the future, especially if the property needs to be sold, refinanced, or transferred. For example, if the surviving tenant wants to sell the property, the title company will require proof of ownership. If the deed still lists the deceased joint tenant, additional legal steps will be required to clear the title, potentially delaying the sale or causing the deal to fall through.
Removing the deceased tenant’s name promptly ensures that the property title is clean and can be transferred without unnecessary delays or legal challenges.
Preventing Estate Confusion
Preventing Estate Confusion
Failing to update the deed can create confusion in estate matters. If the surviving tenant passes away without removing the deceased tenant’s name, the property could inadvertently be tied up in probate or become part of the surviving tenant’s estate in a way that conflicts with their estate plan. This is particularly important if the surviving tenant has a will, trust, or other estate planning documents that are supposed to dictate what happens to the property after their death.
By ensuring the deed is updated, you prevent potential conflicts or delays in distributing the property according to your wishes.
Protecting Your Financial Interests
Protecting Your Financial Interests
Property taxes, insurance, and other financial obligations related to real estate often require up-to-date information on ownership. Leaving the deceased tenant’s name on the deed could result in incorrect billing or challenges when dealing with lenders, insurers, and government agencies.
Property taxes, insurance, and other financial obligations related to real estate often require up-to-date information on ownership. Leaving the deceased tenant’s name on the deed could result in incorrect billing or challenges when dealing with lenders, insurers, and government agencies.
Updating the deed allows you to notify the property tax office and insurance companies of the change in ownership. This ensures that tax bills and insurance policies are properly directed and reflect the current ownership status. It can also help avoid overpayment, lapses in coverage, or other financial missteps.
Streamlining Estate Planning
Streamlining Estate Planning
Maintaining accurate and up-to-date property records is an essential part of effective estate planning. If you plan to transfer the property into a trust or name a beneficiary via a transfer-on-death deed, it’s crucial that the deed accurately reflects your sole ownership of the property. Failing to remove the deceased joint tenant’s name can complicate these arrangements, potentially leaving your loved ones with additional hurdles to navigate.
Take Action Now
Take Action Now
If you are the surviving tenant on a property deed, it’s important to take action and remove the deceased tenant’s name as soon as possible. Doing so ensures that your property rights are clear, your estate plan is properly executed, and you avoid unnecessary legal and financial challenges.
At THE EDWARDS' LAW OFFICES, we concentrate in estate planning and property matters, and we’re here to help you navigate the process of updating property records. We’ll guide you through every step, from obtaining the death certificate to filing the necessary paperwork, so you can rest assured that your property is secure.
Notice. See the disclaimer statement below.
Why Placing Your Child's Name on Your Deed Could Be a Costly Mistake
September 05, 2024 Newsletter - Vol. 1
Why Placing Your Child's Name on Your Deed Could Be a Costly Mistake
When it comes to estate planning, one of the most important decisions you'll make is how to ensure your home is passed on to your loved ones in the way you intend. A common approach many people consider is adding a child's name to the deed of their home. While this may seem like a simple and straightforward solution, it can lead to a host of unforeseen complications and potential financial pitfalls. In contrast, placing your home in a trust offers a more secure and flexible option that can help you avoid these risks.
The Risks of Adding a Child's Name to Your Home
Loss of Control: When you add your child's name to the deed, you effectively make them a co-owner of your property. This means you lose full control over your home. Any decisions regarding the property, such as selling, refinancing, or taking out a loan, would require your child's consent. This could lead to disagreements or complications if your child’s circumstances change.
Exposure to Creditors: Once your child is listed as a co-owner, their financial problems can become your financial problems. If your child faces legal issues, such as bankruptcy or divorce, your home could be at risk. Creditors or an ex-spouse might pursue a claim against the property, jeopardizing your family's most valuable asset.
Tax Consequences: Transferring ownership of your home by adding your child's name to the deed can trigger significant tax liabilities. For instance, if your child decides to sell the home after your passing, they may face capital gains taxes on the appreciation of the property's value since you first purchased it. Additionally, this type of transfer could be subject to gift taxes, depending on the value of the property.
Medicaid Eligibility: Adding your child's name to your home can also impact your eligibility for Medicaid should you require long-term care. The transfer may be considered a gift, potentially disqualifying you from receiving benefits or subjecting you to a penalty period before Medicaid coverage begins.
The Advantages of Placing Your Home in a Trust
Maintaining Control and Flexibility: A trust allows you to maintain full control over your home during your lifetime. You can specify how the property should be managed, who will benefit from it, and when the transfer of ownership will occur. Unlike adding a child's name to the deed, placing your home in a trust keeps the decision-making in your hands.
Protection from Creditors and Legal Issues: When your home is held in a trust, it is generally protected from creditors and legal claims against your beneficiaries. This means that even if your child faces financial difficulties, your home remains safe and can be passed on according to your wishes.
Tax Benefits: A trust can provide significant tax advantages. For example, upon your passing, your child may benefit from a step-up in basis, which can reduce or eliminate capital gains taxes if they sell the property. Additionally, trusts are not subject to the same gift tax implications as adding a child's name to the deed.
Preserving Medicaid Eligibility: Properly structured, a trust can help preserve your eligibility for Medicaid. By placing your home in a trust, you can avoid the penalties associated with transferring ownership and ensure that your assets are protected should you need long-term care.
Conclusion:
While adding your child's name to your home's deed may seem like a convenient solution, it can lead to significant financial and legal complications. Placing your home in a trust, on the other hand, offers a more secure and flexible option that protects your assets, minimizes tax liabilities, and ensures your wishes are honored. At The Edwards' Law Offices, we focus on crafting personalized estate plans that safeguard your legacy and provide peace of mind for you and your family.
Notice. See the disclaimer statement below.
Dying Without a "Will" Or "Trust." The Scenario
Dying Without a "Will" Or "Trust." The Scenario
August 2024 ESTP Newsletter
As an estate planning attorney, we often encounter the common yet critical question: “What happens if I die without a will or trust?” Understanding the consequences of passing away without these essential documents is crucial for ensuring your wishes are honored, and your loved ones are protected. In this month’s newsletter, we explore what happens when you die “intestate” and why taking the time to create a will or trust is so important.
1. State Law Determines Asset Distribution
1. State Law Determines Asset Distribution
No Will or Trust: When you die without a will or trust, state law dictates how your assets will be distributed. These laws vary by state but generally prioritize your closest relatives, such as your spouse and children. If you have no immediate family, your assets may go to more distant relatives, and if no relatives can be found, your estate may ultimately go to the state.
2. Court Appoints a Personal Representative
2. Court Appoints a Personal Representative
No Named Executor: Without a will, you have not named an executor to manage your estate. In this case, the court will appoint a personal representative (often called an Administrator) to handle your affairs. This person may not be someone you would have chosen, and they may be required to post a bond to ensure they perform their duties properly.
3. Assets May Be Frozen Temporarily
3. Assets May Be Frozen Temporarily
Until a Representative is Appointed: Your assets will be frozen until the court appoints a representative. This can delay access to funds and the transfer of property to your heirs, potentially causing financial difficulties for your loved ones during an already difficult time.
4. Potential for Disputes Among Heirs
4. Potential for Disputes Among Heirs
Family Conflicts: Dying without a will can lead to disputes among family members, especially if there are multiple heirs or complex family dynamics, such as blended families or estranged relatives. Disputes can lead to lengthy and costly court battles that deplete the estate’s value.
5. Court-controlled guardianship for Minor Children
5. Court-controlled guardianship for Minor Children
If You Have Minor Children: If you have minor children and no will, the court will appoint a guardian for them. While the court aims to act in the best interest of the children, the appointed guardian may not be the person you would have chosen. This decision can also lead to family disputes.
6. Higher Costs and Longer Process
6. Higher Costs and Longer Process
Probate Expenses: Without a will or trust, the probate process can be more complicated, time-consuming, and costly. This means your loved ones may receive less of your estate than they would have if you had planned ahead.
7. Loss of Control Over Your Legacy
7. Loss of Control Over Your Legacy
No Say in Distribution: Ultimately, dying without a will or trust means you lose control over how your hard-earned assets are distributed, who manages your estate, and who cares for your minor children. Your estate will be handled according to state law, which may not align with your personal wishes.
Conclusion
Conclusion
Dying without a will or trust leaves the distribution of your estate up to state law, which may not reflect your personal wishes or circumstances. To ensure your assets are distributed according to your desires and to minimize the potential for disputes and delays, it's essential to create a will or trust as part of your estate planning. This not only provides clarity for your loved ones but also ensures that your wishes are honored after you're gone. If you have questions or need assistance, an estate planning attorney can help you get started.
Get Started Today
At The Edwards Law Offices, we are focused on helping you protect your legacy and ensure your wishes are honored. If you haven’t yet created a will or trust or need to update your existing documents, we encourage you to schedule a "free consultation" with our experienced estate planning attorney and let us help you take the necessary steps to safeguard your future and provide peace of mind for you and your loved ones.
Notice. See the disclaimer statement below.
Why Keeping Your Estate Plan Updated Is Critical
Why Keeping Your Estate Plan Updated Is Critical
The Costs of Neglecting Your Estate Plan -Part 2 - June 2024
The Costs of Neglecting Your Estate Plan -Part 2 - June 2024
As someone who has already taken the critical step of creating an estate plan (Will, Living Trust, Powers of Attorney, Healthcare Directive), you understand the value of planning for the future. However, an estate plan is not a static document. It needs to evolve with your life. In this newsletter, we want to underscore the significant risks and hidden costs that can arise if you do not update your estate plan after a significant life event.
The Importance of Keeping Your Estate Plan Current
Your estate plan is designed to reflect your wishes and circumstances at a specific point in time. Life is dynamic, and significant events can render your initial plan outdated and ineffective. Without regular updates, your estate plan may no longer align with your current intentions, potentially leading to severe consequences for you and your loved ones.
Key Life Events That Necessitate an Update
Marriage or Divorce: Changes in marital status can dramatically impact your estate plan. If you've recently married, you need to ensure your new spouse is included. Conversely, if you've divorced, it's crucial to remove your ex-spouse to prevent them from inheriting your assets.
Birth or Adoption of a Child: Adding a new family member means your estate plan should be updated to ensure they are adequately provided for both guardianship and financial support.
Death of a Beneficiary or Executor: If a beneficiary or executor named in your estate plan passes away, you must update your plan to appoint new individuals to these roles and adjust the distribution of assets accordingly.
Significant Financial Changes: Whether you've experienced a windfall or financial loss, these changes can impact the distribution of your assets and the strategies best suited for your estate plan.
Relocation: Moving to a different state or country can affect your estate plan, as different jurisdictions have varying laws regarding estates and trusts.
Changes in Tax Laws: Tax laws are constantly evolving, and your estate plan needs to be updated to take advantage of new tax benefits and avoid potential pitfalls.
The Hidden Costs of an Outdated Estate Plan
Unintended Beneficiaries: Without updates, your estate might benefit individuals you no longer wish to include while excluding those you want to support.
Increased Tax Burden: An outdated estate plan might need to utilize the latest tax-saving strategies, leading to higher taxes for your estate and beneficiaries.
Family Disputes: Ambiguous or outdated instructions can lead to conflicts among surviving family members, causing emotional distress and potentially costly legal battles.
Probate Delays: Without clear and current instructions, the probate process can become protracted, delaying the distribution of your assets and increasing administrative costs.
Taking Action: Review and Update Your Estate Plan
To ensure your estate plan accurately reflects your current wishes and circumstances, we recommend that you take a proactive approach and review it at least every three to five years or after any significant life event. Our attorney is here to help you navigate these changes and provide peace of mind that your loved ones are protected.
Schedule Your Review Today
If you've experienced any significant life changes or it's been a while since your last review, we invite you to contact us today to start the conversation about updating your estate plan to align with your goals. Meeting with us can be as convenient as a telephone conference or Zoom-like meeting, reducing the need for unnecessary travel, taking off from work, and spending time with loved ones. The initial consultation is "free."
Notice. See the disclaimer statement below.
Will vs. Trust - What's the Difference?
Will vs. Trust - What's the Difference?
August 2024
When planning for the future, one of the most important decisions you can make is how to manage and distribute your assets. Two of the most common tools for this purpose are wills and trusts. Understanding the differences between these options can help you make an informed decision that best suits your needs and ensures your wishes are carried out. In this blog, we'll explore the key features, benefits, and considerations of wills and trusts.
When planning for the future, one of the most important decisions you can make is how to manage and distribute your assets. Two of the most common tools for this purpose are wills and trusts. Understanding the differences between these options can help you make an informed decision that best suits your needs and ensures your wishes are carried out. In this blog, we'll explore the key features, benefits, and considerations of wills and trusts.
What is a Will?
A will is a legal document that outlines how you want your assets distributed after your death. It also allows you to name an executor to manage your estate and guardians for your minor children. Here are some key points to consider about wills:
Simple and Straightforward: Wills are generally easier to create and require fewer formalities than trusts.
Probate Process: After your death, your will goes through probate, a court-supervised process that validates the will and oversees the distribution of your assets. This process can be time-consuming and may involve legal fees.
Public Record: Once a will goes through probate, it becomes a matter of public record, which means anyone can access the details of your estate.
Flexibility: You can update or revoke your will at any time as long as you are mentally competent.
What is a Trust?
A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. Trusts can be established during your lifetime (living trusts) or after your death (testamentary trusts). Here are the key points about trusts:
Avoiding Probate: One of the primary advantages of a living trust is that it allows your estate to bypass the probate process, which can save time and reduce costs for your beneficiaries.
Privacy: Unlike wills, trusts are not a matter of public record, so the details of your estate remain private.
Continuity and Control: Trusts can manage your assets if you become incapacitated, ensuring continuity and control over your estate.
Complexity and Cost: Setting up a trust can be more complex and costly upfront compared to a will. However, the potential savings in probate expenses may offset these initial costs.
Choosing the Right Option For You
The choice between a will and a trust depends on various factors, including the complexity of your estate, your privacy concerns, and your desire for control over your assets. Here are some considerations to help you decide:
Estate Size and Complexity: If you have a large or complex estate, a trust may offer more benefits in terms of management and distribution.
Privacy Concerns: If you prefer to keep your estate details private, a trust is a better option.
Cost Considerations: While trusts can be more expensive to set up, they may save money by avoiding probate costs.
Incapacity Planning: A trust provides flexibility to ensure your assets are managed if you become incapacitated.
Understanding the differences between wills and trusts is crucial for effective estate planning. Both tools have advantages, and they can be used in conjunction to provide a comprehensive plan that meets your needs.
Understanding the differences between wills and trusts is crucial for effective estate planning. Both tools have advantages, and they can be used in conjunction to provide a comprehensive plan that meets your needs.
Contact Us
Contact The Edwards' Law Offices today to schedule a "free" consultation and take the first step toward securing your legacy.
Contact The Edwards' Law Offices today to schedule a "free" consultation and take the first step toward securing your legacy.
Notice. See the disclaimer statement below.
Planning For Incapacity. What Is Your Plan?
Planning For Incapacity. What Is Your Plan?
May 10, 2024
May 10, 2024
Welcome to our newsletter.
In life's journey, we often focus on milestones, achievements, and dreams for the future. But amidst our aspirations, it's crucial to acknowledge the possibility of unforeseen circumstances that can disrupt our plans. One such circumstance is incapacity—a state where we cannot make decisions due to illness, injury, or other factors. While it's not a pleasant topic to dwell on, incapacity planning is a vital aspect of estate planning that ensures your wishes are honored. Your affairs are managed in the event of such a situation.
Understanding Incapacity
Before we delve into the specifics of incapacity planning, let's take a moment to understand what incapacity truly means. Incapacity refers to the inability to make informed decisions or manage one's affairs due to physical or mental impairment. The causes of incapacity are varied and can include:
Aging: With advancing age, individuals may experience cognitive decline or physical impairments that affect decision-making abilities.
Chronic Illness: Conditions such as Alzheimer's disease, dementia, and other degenerative diseases progressively impair cognitive function, eventually leading to incapacity.
Traumatic Brain Injury: Accidents or injuries that affect the brain can result in temporary or permanent incapacity, impacting decision-making abilities and everyday functioning.
Stroke: Sudden impairments in speech, mobility, and cognitive function caused by strokes can render individuals unable to manage their affairs independently.
Mental Health Disorders: Conditions such as severe depression, bipolar disorder, or schizophrenia can impair judgment and decision-making, necessitating support and intervention.
What is Incapacity Planning?
Incapacity planning involves making legal arrangements to manage your affairs effectively if you cannot do so yourself. This proactive approach allows you to designate trusted individuals to make decisions for you and outline your medical treatment and asset management preferences. Critical components of incapacity planning include:
Advance Directives: Documents like a durable power of attorney for finances and a healthcare proxy or medical power of attorney designate agents to make financial and medical decisions if you're incapacitated.
Living Will: A living will enables you to specify your preferences for medical treatment, including end-of-life care decisions if you cannot communicate your wishes.
Trusts: Establishing a revocable living trust can facilitate the management of your assets during incapacity by appointing a successor trustee to oversee trust assets and distributions according to your instructions.
Who Needs Incapacity Planning?
Incapacity planning is not reserved for a specific demographic—it's essential for everyone. Accidents, illnesses, or unexpected events can occur at any age, making it imperative to have plans in place to protect your interests and ensure continuity in managing your affairs. Whether you're a young professional, a new parent, or a retiree, incapacity planning provides peace of mind, knowing that your wishes will be honored, regardless of your ability to communicate them.
What Incapacity Planning is Not
It's essential to clarify what incapacity planning is not. It's not just drafting a will or creating a trust to distribute assets after death. Incapacity planning focuses on addressing the possibility of becoming unable to make decisions or manage affairs during one's lifetime. By preparing for incapacity, you take proactive steps to protect yourself and your loved ones from potential hardships and uncertainties.
Consequences of Not Having An Incapacitation Plan
Failing to establish an incapacity plan can have significant consequences for you and your loved ones. Without designated decision-makers or legal directives in place:
Court Intervention: Family members may need to petition the court to appoint a guardian or conservator to make decisions on your behalf, resulting in costly and time-consuming legal proceedings.
Family Disputes: Disagreements among family members regarding decision-making authority can lead to conflicts and strained relationships during already stressful times.
Financial Vulnerability: Without proper oversight and planning, your assets and financial affairs may be vulnerable to mismanagement, exploitation, or depletion.
Take Action Today
Incapacity planning is a proactive step toward securing your future and protecting your interests during times of uncertainty. Consult with an experienced estate planning professional, like The Edwards' Law Offices, to create a comprehensive plan. Remember, the best time to plan for incapacity is before it occurs. By taking action today, you can enjoy peace of mind knowing you've taken steps to safeguard yourself and your loved ones.
If you have any questions or concerns about estate planning or need help with finalizing your plan, contact The Edwards' Law Offices today for a "free" consultation.
Notice. See the disclaimer statement below.
Seven Benefits of A Revocable Trust
Seven Benefits of A Revocable Trust
(The Benefits of a Revocable Trust - February 21, 2023)
More and more individuals are putting their assets (real, personal, financial) in revocable living trusts ("living trusts") for management, protection, and distribution because of the benefits. A living trust is created during your lifetime and funded with most or all of your assets by simply re-titling them to yourself as the trustee. Those assets are held in trust for your benefit during your lifetime and then for that of designated beneficiaries, per the terms of the trust, when you pass away.
Benefits Include:
A. Probate Avoidance.
The probate process can be expensive (i.e., court fees, appraisal fees, accountant, executor, and attorney fees) and can significantly reduce the value of the distribution to beneficiaries. A “living trust” can avoid probate. Having only a will does not. This is a significant benefit if you own real estate in several states.
2. Quick Distribution.
The probate process can take at least 6 months and sometimes years to complete, and the assets are distributed. With a "living trust," assets can be distributed almost immediately upon death.
3. Confidentiality.
Probate records contain information about the nature and value of estate assets, beneficiaries, and creditors and are open to public scrutiny. Unlike a "will," a "living trust" is confidential and can protect the privacy of loved ones.
4. Disability Protection.
If you (the trustee) become seriously ill (disabled or incapacitated), guardianship or conservatorship may become necessary. They can take months to years to complete, and the costs could run several thousands of dollars annually. A "living trust" can provide for this contingency by naming a successor trustee to take over the administration during any disability.
5. Revocable.
A “living trust” can be revoked or changed at any time and for any reason while you are competent.
6. Effective Immediately.
Unlike a will, which does not become effective until after your death, a “living trust” becomes effective immediately upon funding. You can continue to enjoy all the present benefits of your assets without changing your ability to control them.
7. Protection Against Waste.
A “living trust” can protect against the squandering of the estate by a minor (a person under 18). It can ensure that assets/funds designated for them are used/spent responsibly and not all at once, especially if the assets/funds are intended for a specific purpose or occasion (i.e., a certain age, college). Management of the assets/funds can continue beyond age 18 and be allocated in increments. This feature can also apply to other beneficiaries with money-handling issues.
However, in spite of their increasing popularity, a revocable living trust is not a “one-size-fits-all” estate planning vehicle. It has some downsides, including being more complex than wills, requiring more time and expense to create at the outset, not providing any tax benefits during your lifetime, and not protecting assets from creditors. It’s best to consult an estate planning professional to discover what type of estate plan would work best for your estate.
Contact The Edwards' Law Offices today to discuss if a revocable trust is right for you.
Notice. See the disclaimer statement below.
Ten Reasons To Create An Estate Plan
Ten Reasons To Create An Estate Plan
(Secure Your Legacy and Protect Ones - October 18, 2023)
Planning for the future and the unexpected is a critical life decision. Yet, many individuals delay creating an estate plan, leaving their assets, loved ones, and themselves unprotected. At The Edwards Law Offices, we understand the importance of careful estate planning. Our seasoned attorney, licensed in Illinois and Missouri, can help you safeguard your hard-earned assets to ensure the well-being of your family, loved ones, future generations, and yourself.
What is an Estate Plan?
An estate plan is a comprehensive set of legal documents and strategies that outline how your estate will be managed, distributed, and protected during your lifetime and after your death. It can ensure that your wishes are fulfilled, your loved ones are provided for, and your financial and healthcare affairs are in order. It goes beyond just creating a will and can involve establishing trusts, naming beneficiaries, designating powers of attorney, and more.
You Have An Estate
Everyone has an estate. Your estate encompasses everything you own(e.g., real estate, bank accounts, investments, personal possessions, life insurance policies, retirement accounts, and obligations), regardless of the value and composition. Additionally, it includes your family or loved ones and yourself.
Why You Need An Estate Plan
Every adult needs an estate plan. It is not just for the wealthy, elderly, married, and people with children. With an Estate Plan, you can:
Provide for Your Immediate Family:
If you are a couple, you want to provide enough money for the survivor. Also, if you have children under 18, both you and the other parent should have a last will and testament (will) to nominate personal guardians for the children in case you both should die before they grow up. Otherwise, a court will decide where your kids will live without your input and who will make important decisions about their money, education, and way of life.
Avoid Probate:
The proceedings are public, expensive, and time-consuming but proper planning can avoid them.
Prepare for Healthcare Decisions:
Estate plans go beyond asset distribution; they provide end-of-life healthcare with tools like healthcare proxies and powers of attorney. These documents let you express your wishes, ensuring your healthcare decisions are honored even if you can't communicate them yourself.
Utilize Trusts:
You can choose between trusts, wills, or a combination. Trusts protect and govern the distribution of assets to beneficiaries. If you're considering trusts, our firm is here to guide you.
Designate an Executor(s)/Trustee(s):
You can choose competent executors/trustees, and giving them the necessary authority can save money, reduce the burden on your survivors, and simplify the administration of your estate.
Secure Your Business's Legacy:
If you're a small business owner, planning for your company's future after your passing is vital. You can arrange a seamless transition, putting your hard-earned legacy in capable hands.
Give To Your Favorite Charity:
You can support religious, educational, and other charitable causes during your lifetime or upon your death and take advantage of tax laws designed to encourage private philanthropy.
Provide for Beneficiaries With Special Needs:
If you have a child or beneficiary with special needs (i.e., educational, learning, and physical needs), you can provide for them and protect their entitlement to government benefits.
Pre-Arrange Your Funeral:
You can finalize your final disposition and relieve grieving survivors of that responsibility.
Save on Taxes and Costs:
You can minimize estate taxes and administrative costs, preserving more wealth for your heirs.
When You Should Make An Estate Plan
The best time to make an estate plan (or update an old one) is now! No one likes to think about dying or possibly being incapacitated. Such is why many families are caught off-guard and unprepared when incapacity or death strikes. Don't wait. You can put something in place and change it later. This is precisely how estate planning should be done.
If you have questions about estate planning or need help finalizing your plan, contact us today.
Notice. See the disclaimer statement below.
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