Understanding Estate Planning
The Importance of Estate Planning Services
Essential Estate Planning Documents
- Last will and testament: This is also called a “will” and is a fundamental legal document. It is a written instruction detailing how you want your assets and property distributed upon passing. Additionally, it enables you to designate guardians for minor children and nominate an executor to oversee the administration of your estate.
- Trusts: Trusts are versatile tools that help you efficiently manage and distribute your assets. They can also help you avoid probate, provide for minor children or beneficiaries with special needs, and protect your assets from certain taxes and creditors.
- Powers of Attorney: This document will provide someone with the authority to make financial or healthcare decisions on your behalf. This handles financial matters, while a healthcare power of attorney makes medical decisions.
- Beneficiary Designations: You can specify beneficiaries for particular assets such as retirement accounts and life insurance policies. These designations determine who receives these assets outside of your will or trust.
- Healthcare Directives: An advanced healthcare directive outlines your preferences for medical treatments and end-of-life care, ensuring your wishes are followed if you cannot communicate them.
- Guardianship Provisions: If you have minor children, your estate plan can specify who should become their guardian if both parents pass away prematurely.
Understanding Estate Planning Costs
- Attorney Fees: Estate planning attorneys typically charge flat fees for services like drafting a will or creating a trust. Depending on the complexity of your estate, fees can range from hundred to several thousand dollars.
- Trustee Fees: If you establish a trust, you may need to pay ongoing trustee fees, which can be either a percentage of the trust’s assets or a flat annual fee.
- Notary and Filing Fees: Costs may be associated with notarizing and filing estate planning documents with the appropriate authorities.
- Financial Advisor Fees: If you work with a financial advisor, their fees may be based on assets under management or an hourly rate.
- Update and Maintenance Costs: Estate plans should be periodically reviewed and updated, which can incur additional costs.
Estate Planning FAQs
While the individual can create essential estate planning documents, consulting with an experienced estate planning attorney is advisable, especially for more complex estates. An attorney can ensure the documents adhere to state laws and consider the individual’s circumstances.
Estate plans should be updated periodically when significant life events occur, such as marriage, divorce, the birth of children, or changes in financial circumstances. It is advisable to revisit your plan every few years.
If you pass away without an estate plan, your assets and estate will be subject to the laws of intestacy in your jurisdiction. Estate planning documents help ensure your assets are distributed as you intend.