You've spent your life building something you're proud of and caring for the ones that you love. While it can be a difficult subject to approach, it is equally as important to develop an estate planning strategy that protects your life's work. A well-developed estate plan will help to ensure that your family is taken care of, your assets are protected, and your final wishes are upheld. Whether you want help creating a simple will or need assistance with more complex aspects of the estate planning process, Milwaukee estate planning attorney Brad Sarkauskas can help. Call Heritage Law Office of Wisconsin to learn more.
Avoiding Probate
Probate is the legal process for distributing your property, and paying off your creditors, after you pass away. Although the probate process is intended to protect the deceased, the deceased's property, the beneficiaries, and the creditors of the deceased, probate has its downside. The probate process can be a long, drawn out process that can be quite expensive. The good news is that probate can be avoided, saving both time and money for your beneficiaries. Estate Planning Attorneys will look to a number of different strategies to avoid the probate process, including transferring property, adding joint owners to property, using beneficiary designations on assets, and using Trusts. Of course, each of these strategies has its own set of benefits as well as potential downsides so it is important to know the legal consequences of each strategy prior to engaging in one.
Planning for Incapacity
If you become unable to manage your own finances, it is important to have a plan in place to ensure a smooth transition to allow someone you trust to manage your finances on your behalf. Many people falsely believe that their spouse or adult children will be able to automatically be able to step in and manage their finances in the event they become incapacitated. The reality, however, is that, unless you have a proper plan in place, court for permission will be necessary to someone to step in to manage your financial affairs. This process can be not only costly, but stressful as well. Even if the court appoints the person you prefer, they may have to come back to the court on a regular basis to update the court, which can continue to add to expenses and stress.
If you want your family to be able to immediately take over in the event of incapacity, you must properly designate someone that you trust in proper legal documents so that they will have the authority to pay bills, handle your insurance, take required distributions from your IRAs, sell stocks or bonds, access your checking account, or handle even the most routine financial matter.
Planning for incapacity involves more than just financial issues. A well drafted plan should establish a plan for your medical care as well. The law allows you to appoint someone you trust, such as a family member or close friend, to make medical decisions on your behalf if you are unable to do so yourself. You can do this by drafting a Power of Attorney for Health Care wherein you can designate a person to make such decisions. Another important part of planning for incapacity is the creation of a Living Will. A Living Will informs others of your wishes and desires relative to medical treatments, such as the use of extraordinary measures in the event that you become terminally ill or are permanently unresponsive.
Planning for Minor Children
If you have minor children at home, it is important that your estate plan makes arrangements for your children. A well drafted plan should not only designate who you would like to manage your assets, but should also indicate who you would like to raise your children should the unthinkable happen . Often times courts are left guessing as to what parents would have wanted for their children. If you are lucky enough to have the best person selected by the court, they may have substantial restrictions placed on them by the court and may have added burdens, such as having to provide annual accountings.
Protecting Beneficiaries
Often times, parents fear that the money they have worked so hard to accumulate will be squandered by their children. Whether beneficiaries lack the maturity to manage assets, have chemical dependency issues, or are being pursued by creditors, parents often times want to protect their beneficiaries from the themselves as well as from creditors and predators. Estate planning attorney may address this issue by drafting a Trust with a Spendthrift Provision, affording an added layer of protection for their beneficiaries.
Planning for Estate Taxes
The two certainties in life...death and taxes. The good news is that some taxes can be minimized or avoided all together. Tax law as well as various other laws create opportunities for not only protecting and preserving wealth, but also afford opportunities to minimize tax liabilities. Anyone who has review the tax code can attest to just how complex our tax laws can be. Consulting with an estate planning attorney and properly positioning your estate based on a well designed plan could result in significant tax saving both during your lifetime and after your death.
Charitable Giving
People that wish to make a charitable contribution, either during their lifetime or after death, can get the biggest bang for their buck and provide the most financial benefit to the charity by properly planning the gift. Whether making a one time gift or a continuing charitable gift, proper planning can help you as well as the charity that is dear to your heart.
Call Heritage Law Office of Wisconsin to learn more.
Frequently Asked Questions (FAQs)
1. What is estate planning and why is it necessary?
Estate planning involves creating a plan in advance and naming the individuals or organizations you want to receive your assets after you pass away. It's necessary to ensure your wealth and assets are distributed according to your wishes, rather than defaulting to state inheritance laws. It can also help to minimize taxes and legal fees, provide for minor children, and avoid the potential complications and delays of probate.
2. How can probate be avoided?
Probate can often be avoided by implementing specific strategies such as transferring property, adding joint owners to property, using beneficiary designations on assets, and using Trusts. However, each strategy has its benefits and potential drawbacks, and it's crucial to understand the legal implications of each before making a decision. An experienced estate planning attorney can provide valuable guidance in this area.
3. What does planning for incapacity mean?
Planning for incapacity involves setting up arrangements to allow someone you trust to manage your finances and make health care decisions on your behalf should you become unable to do so. This could be due to an accident, illness, or cognitive impairment. Legal documents, such as a power of attorney and living will, are essential components of this plan.
4. How can an estate plan protect my minor children?
An estate plan can protect minor children by specifying a guardian to take care of them if both parents die before the children turn 18. Additionally, an estate plan can establish a trust to manage the inheritance until the children are old enough to handle it themselves. Without these provisions, the court will decide who cares for the children and manages their inheritance.
5. What are the benefits of including charitable giving in my estate plan?
Including charitable giving in your estate plan can not only fulfill your personal philanthropic goals but can also provide substantial tax advantages. Donated assets are removed from your estate for estate tax purposes. Depending on the structure of the gift, you may also be able to reduce your income tax or capital gains tax liability. As with all aspects of estate planning, it's important to consult with a knowledgeable attorney to understand the potential implications.
