When you think about creating an initial estate plan, you likely focus entirely on the need to create a roadmap for the distribution of your estate assets in the event of your death. While that certainly will always remain an important estate planning goal. You will undoubtedly include additional goals into your estate plan over time. The best way to decide which estate planning goals should be included in your plan is to consult with an experienced estate planning attorney. In the meantime, however, it may help to learn more about some of the most common estate planning goals.
People typically associate the possibility of becoming incapacitated with old age, specifically with Alzheimer’s and other age-related dementia conditions. While Alzheimer’s will certainly lead to incapacity eventually, the reality is that you would suffer a period of incapacity at any age as a result of a tragic accident or debilitating illness. If that happens, who will take over control of your assets? Who will make health care decisions for you? In the absence of an incapacity planning component in your estate plan, a judge may be forced to answer those questions – and you may not like the answers.
Probate is the legal process that is required after the death of an individual. The primary purpose of probate is to identify, value, and eventually transfer the decedent’s assets to the intended beneficiaries and/or heirs of the estate. If the estate is required to go through formal probate, it can take months, even years, to get through the process. In addition, a lengthy probate can be costly, often diminishing the value of the estate that is ultimately passed down to loved ones. Probate avoidance tools and strategies can help your estate avoid the need for formal probate.
Planning for Parents with Minor Children
If you are the parent of a minor child, you undoubtedly want to make sure your child is provided for if something happens to you. Your minor child, however, cannot inherit directly from your estate. As such, simply leaving assets for your child in your Will doesn’t ensure that your child will be well cared for in your absence. Instead, most parents establish a trust to protect their child’s inheritance until the child reaches the age of majority. As the Settlor of the trust, you appoint someone as the Trustee to manage and invest the trust assets while your child is a minor. That same trust can then be used to stagger disbursements once your child becomes an adult, allowing your child to learn how to manage his/her inheritance before receiving it all.
Asset Protection Planning
You will probably spend the better part of your life working hard and investing wisely to build up your estate assets. Acquiring assets is only the first step though. You must then think about protecting the assets you have acquired. Most people are not aware of the numerous and varied threats to their assets. An asset protection attorney can help you identify those threats and incorporate asset protection tools and strategies into your estate plan to keep your assets safe.
Long-Term Care Planning
Long before you reach retirement age, you should start thinking about the possibility that you, or a spouse, will need long-term care (LTC). Specifically, you need to plan for the high cost of that care. With a nationwide average of over $80,000 per year for 2018, most people cannot afford to pay for LTC out of pocket – and Medicare will not cover LTC expenses. Medicaid can help with those expenses but you must first qualify for Medicaid benefits. Medicaid uses both an income and an asset test that could be problematic if you failed to include Medicaid Planning in your estate plan well ahead of the time you need to qualify.
Contact an Estate Planning Attorney
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about which goals you should include in your estate plan, contact Sinclair Prosser Law, LLC by calling (410) 573-4818 or (301) 970-8080 to schedule an appointment.