Estate Planning
There are many legal strategies involved in estate planning, including wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents. New clients often say that they do not have an estate plan. Most people are surprised to learn that they actually do have a plan. In the absence of legal planning otherwise, their estate will be distributed after death according to Missouri’s laws of intestacy. Of course, this may not be the plan they would have chosen. A properly drafted estate plan will replace the terms of the State’s estate plan with your own. Start the process and create your estate plan alongside an estate planning lawyer.
When Should I Prepare My Estate Plan?
This is a common question I get at speaking engagements; the answer is always…before you need it.
College Age Children
College age children should have a basic set of estate planning documents, including financial and health care powers. Even though he or she is still a child in your eyes, in the eyes of the law they are no longer under your care and you must have permission to make health care and financial decisions forthem.
Newly Married
If you are newly married, create a plan to make sure your new spouse knows how you feel about health care and has power to make those decisions as well as financial decisions.
First Child
When you have your first child, you will want to make sure you choose who raises your child if you cannot.
Divorced
During or after a divorce, if you become incapacitated or pass away, your loved ones should still be protected. This can be even more important if the divorce is during a second marriage.
Divorced & Remarried
When a divorced individual gets remarried, especially if there are children from previous marriages and the couple intends to have children together.
Near Retirement
When you near retirement, review your plan to make sure it is consistent with your retirement goals and begin investigating planning for catastrophic health care events and long-term care needs.
You can begin the estate planning process at any time after reaching adulthood. Your needs will vary based on your stage of life, health, finances, family dynamics, and many other factors, so it is important to work with an experienced attorney who understands how to prepare a plan with you
Learn About What Strategies Are Available to Create Your Estate Plan Today
There are many strategies available to create an estate plan for your needs. Contact The Estep Law Firm, LLC, and we can explain these strategies and the documents necessary to make these strategies work.
Last Will & Testament
Your Last Will and Testament is a set of instructions for the probate court expressing your wishes for management and distribution of assets you own individually on your death. Most states require that the Will be admitted to the Probate court within a certain time frame for it to be valid, in Missouri your Will must be presented for admission no later than 12 months from the date of your death. Some things you should know about wills:
A will has no legal authority until after death. So, a will does not help manage a person’s affairs when they are incapacitated, whether by illness or injury.
A will does not help an estate avoid probate. A will is the legal document submitted to the probate court, so it is basically an “admission ticket” to probate.
A will is a good place to nominate the guardians (or back-up parents) of your minor children if they are orphaned. All parents of minor children should document their choice of guardians. If you leave this to chance, you could be setting up a family battle royal, and your children could end up with the wrong guardians.
Trusts
Trusts come in many “flavors,” they can be simple or complex, and serve a variety of legal, personal, investment or tax planning purposes.
Types of Trusts
Living Trusts
Irrevocable Trusts
Testamentary Trusts
Special Need Trusts
At the most basic level, a trust is a legal entity with at least three parties involved: the trust-maker, the trustee (trust manager), and the trust beneficiary. Oftentimes, all three parties are represented by one person or a married couple. In the case of a revocable living trust, for example, a person may create a trust (the trust-maker) and name themselves the current trustees (trust managers) who manage the trust assets for their own benefit (trust beneficiary).
Advantages of Trusts
Depending on the situation, there may be many advantages to establishing a trust. Reach out to our estate planning lawyers to find out if you and your family could benefit from establishing a trust.
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Avoid probate court
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In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries (or heirs) immediately upon the death of the trust-maker(s) with no probate required
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Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary
Or they may be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust-maker(s) and the named beneficiaries
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If well drafted, another advantage of trusts is their continuing effectiveness even if the trust-maker dies or becomes incapacitated
Powers of Attorney
A power of attorney is a legal document giving another person (the attorney-in-fact) the legal right (powers) to do certain things for you. What those powers are depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker, and may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions).
When the intent is to designate a back-up decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.
Durable Power of Attorney for Finance
Your Durable Power of Attorney for Finance is a set of instructions giving your agent, also known as an attorney-in-fact, permission to make legal decisions for you, manage assets, gain access to government information and employer information, apply for federal and state benefits, and make personal non-health care decisions.
Powers of attorney for older clients should include additional specialized powers that expand financial protection in the event of a catastrophic health care event or need for long-term care.
Health Care Power of Attorney
Your Health Care Power of Attorney is a set of instructions giving your health care decision maker permission to make decisions regarding medications, treatments, procedures, care givers, physicians, which hospital will treat you
and what nursing home you will receive skilled nursing care in.
Estate Planning Health Care Documents (or Advance Directives)
An advance directive is an estate planning document that specifies the type of medical and personal care you would want should you lose the ability to make and communicate your own decisions. Anyone over the age of 18 may execute an advance directive, and this document is legally binding in Missouri.
