What is estate planning?
In estate planning, you anticipate and make arrangements for the disposal of your estate. Your estate is your net worth – the total of all your assets less liabilities. The goals of estate planning are to minimize uncertainties in how to handle your estate after your death and to maximize the value of the estate by reducing taxes and other expenses.
Estate planning typically consists of a standard package – Last Will and Testament, Power of Attorney, Appointment of Agent for Funeral Arrangements, Living Will and Health Care Proxy. Other documents may be required based on the individual’s situation, such as guardianship for minor children to set up a trust that will hold property for someone else.
Most people review their estate plan after significant events: marriage, death, the birth of a child, retirement, etc. This is a great consideration, but these events may be separated by years. You should aim to review your estate plan with your attorney on an annual basis. Often times, clients are unaware of changes that can have an effect on their estate (tax laws, health conditions), or their wishes may evolve over time (feelings about people and treatments may change). By revisiting your estate plan on a regular basis, you are ensuring that your documents are accurate and current.
Why is estate planning important?
Your passing is an emotional time for the loved ones you leave behind. Without proper documentation, taking care of your estate can heighten the emotional stress for those left with that responsibility. Estate planning allows you to take control of how your property is transferred after your death and minimizes the decision-making and coordinating by your survivors.
What is the role of the attorney in estate planning?
While an attorney is not legally required to draw up estate planning documents, it is highly recommended. Your attorney should be able to guide you through which documents are necessary based on your unique situation. The attorney can also ensure that the documents are clear and that they include all the required parts to make them legally enforceable. For example, your will should revoke all previous wills and codicils to avoid inconsistencies and confusion. Your attorney can also assess the impact and interplay of various legal documents such as prenuptial agreements, divorce decrees and other documents that impact your ability to gift your estate freely. Your attorney can add valuable advice and serve as a buffer during tense family situations.