There is no better time than the present to begin planning for one’s future. Whether budgeting income and expenses, managing an investment portfolio, or purchasing life insurance, many of us engage in a variety of risk-reducing behavior. Preparing for the unexpected is an important part of anyone’s life—especially when there are others who rely on us. But few, however, take steps to plan for when they are gone. Indeed, relatively few Cedar Park residents have completed what is perhaps the most important planning strategies available—that is, the estate plan.
The benefit of advanced estate planning is rarely apparent to those without an immediate estate planning need. However, the time, cost and stress of the probate process without a proper estate plan is substantial enough to give anyone pause. The probate courts serving Cedar Park regularly have probate timelines that stretch beyond 18 months.
Though probate timelines can be quite lengthy, the inclusion of a well-drafted will can significantly reduce the expected probate timeline. Often, some Cedar Park residents find difficulty discussing the topic of estate planning. This is a normal reaction. But in order to ensure the interests of our loved ones are properly looked after, we must sometimes address these uncomfortable topics. Moreover, the most effective estate planning lawyers will have not only the legal acumen, but also the social awareness to address clearly and empathetically address any issues. Continue reading for an overview of some estate planning basics.
At its core, estate planning is the process through which one provides instructions for the disposition of his or her property. “Estates,” generally, are legal fictions that denotes the right to hold property. Because deceased individuals cannot hold legal title to property, their title transfer upon their death to their estate, where it can be distributed to living individuals. One’s estate can include all forms of property, such as real estate, bank accounts, investment portfolios, mineral rights, intellectual property, etc. An estate plan allows individuals to specify exactly how they would like their property distributed after their death or incapacitation. Cedar Park residents routinely distribute property to loved ones, religious organizations and educational institutions. Once the goals of the estate planner are understood, the instructions regarding the disposition of his or her property are compiled into the “estate plan.” Estate plans can range from simple single-page documents to voluminous legal regimes. Some may be concerned that their estate plan can never be altered. This is not so. Estate plans alterations—big or small—may occur at any time. In fact, it is advisable to periodically review your estate plan to ensure that its terms accurately address your current priorities and values. Significant life events such as births, marriages and divorces also present an opportunity to revisit an estate plan.
The Power of Attorney is a document that grants third parties the authority to make legally binding decisions on one’s behalf. In the past, the will was the principal document in the average estate plan. But with recent advances in medical science, we must now recognize that many of us will become incapacitated (that is, not able to make decisions for ourselves) before passing away. The Power of Attorney helps in this regard by allowing another person to make decisions for you. This type of document can be simple, granting a single Power of Attorney all decision-making authority, to extremely complex with different Powers of Attorney authorized for specific subjects or decisions. Similar to the Power of Attorney is the Living Trust enables the signor to express his or her preferences for health care decisions in the event of incapacitation. Many Cedar Park residents have also included resuscitation instructions and end-life-measures in their Living Trusts.
The will typically occupies a foundational role in many estate plans. The goals of the will are expressed by its testator, or creator. Each will designates a person to act as its executor. The executor manages the distribution of the testators property (with the permission of the probate court). One who receives a property distribution is called a beneficiary. As was mentioned briefly above, the administration of the will occurs in a special legal forum called Probate Court. Sometimes, a person will die without having drafted a will; this is called dying intestate. The added stress and complexity of the probate process for intestates is often reason enough to draft an estate plan. Please note: In recent years, website offering “all-in-one” wills have marketed their products to millions of consumers. But these offerings’ small upfront savings are only possible through identical, cookie-cutter forms. Though, such forms may satisfy the needs of a portion of consumers, it is highly recommended to discuss your goals and circumstances with an experienced estate planning attorney first.
Though a well-drafted will is often enough to address the needs of a great majority of people, a will may not be able to provide the best options for some Cedar Park residents. For those seeking a more advanced option, a trust may offer the best solution. Unlike a will, which is simply a legal document, a trust creates a fiduciary relationship between a number of parties. The grantor creates the trust, determines its terms, and “funds” the trust with assets. The trust is managed by a trustee (who is chosen by the grantor), who administers the trust’s assets in accordance with the grantor’s instructions for the benefit of the beneficiaries. The beneficiaries are the people who enjoy the benefits of the trust relationship. While these three roles are often occupied by three or more different people, sometimes a single individual can occupy all three simultaneously. Unlike the probate system that administers wills, trusts retain legal title of their own assets. Consequently, none of the assets held by a trust need to be entered into probate. Bypassing the probate process can save a great deal of time and money. However, the added complexity required during trust formation and vesting (asset transferal) means that a trust may cost more upfront than a will. Still, the benefits of trusts are responsible for several decades of increased popularity. Whether your estate would benefit from a trust can be a complicated question, so it is best to seek out a lawyer experienced in both wills and trusts.
If you are eager to learn more about your estate plan options, or if you would like to review your current estate plan, contact one of the experienced Cedar Park attorneys at Kirker | Davis LLP to schedule a meeting today.
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