Do you continue to push off the idea of estate planning? If you haven’t already begun thinking about how your estate will be distributed and cared for after your death, then you’re leaving a lot to chance on the table regarding your assets, investments, and family.
What Goes Into Estate Planning? It Can Be More Complicated Than You Think
Did you know that 71% of Americans do not have an up-to-date will?
Estate Planning is the process of anticipating and arranging for the disposal of your estate. There are a variety of legal documents used to complete this process. The most common are Wills and Trusts.
- Will: A will is the most straightforward of all estate planning documents. In a will, you state who your beneficiaries will be and who will administer your estate. A will begins to function after one’s passing. Then, the Will must be admitted to Court through a Probate Administration. All of the assets will pass to the beneficiaries as stated in the Will.
- Trust: A trust is a legal document in which a trustee holds legal title to a specific property. The property is to be administered for the benefit of the beneficiaries named in the trust. A Trust can either be revocable or irrevocable. You choose who the trustee will be. A trust differs from a will in a few keys ways. First, the trust begins to function once it’s executed. Also, if funded correctly, a trust does not require a lengthy and costly Probate Administration.
There are also advanced directives like Durable Power of Attorney, Living Wills and Health Care Surrogate Designation that an estate planning attorney can help you put in place. These legal documents are tools by which you can designate another person to make important decisions. Medical and financial decisions can be made on your behalf. This can be the case if you are unable to make decisions for yourself in the future.
The agent or attorney in fact is in charge of certain duties not handled by wills or trusts.
These duties include:
- Durable Power of Attorney: A durable power of attorney is a unique power of attorney in that it remains effective if a person becomes incapacitated. This is accomplished by specific language within the document that provides for the survival of the power. These documents are used by the attorney-in-fact to handle decision making for the incapacitated person. Durable powers of attorney are a good tool to try and avoid a guardianship case.
- Living Wills: In order to specify your wishes for care in the event of an end-stage condition, terminal condition or if you are ever in a permanent vegetative state, a living will must be established. This document allows you to state whether or not you wish to have life-prolonging medical procedures administered if you are somehow incapacitated. Living wills can help remove trauma and stress for loved ones who may be left to make those decisions without your guidance.
- Health Care Surrogate Designation: This document allows you to choose someone to make medical decisions for you in the event you cannot make those decisions yourself. This document is limited to health care decisions only.
These documents help one avoid a potentially lengthy, costly, and litigated guardianship process. They allow the person to make the decisions on their future care during their lifetime and relieve stress on the family in what are very difficult situations for all involved.
Estate Planning for Foreign Nationals
U.S. citizens have the benefit of marital exemptions in the event of a marital death. This means there is no charged estate tax upon the death of a spouse—if the surviving spouse inherits—but this does not apply to foreign nationals.
Also, lifetime gift and estate tax exemptions for U.S. citizens and Resident Aliens is $11.18 million. This means that estates with less than $11.18 million are tax-exempt. For Foreign Nationals, this exemption is only $60,000.
There are many ways in which tax laws can save Foreign Nationals money during estate planning, but the rules are a bit trickier. If this situation applies to you, we’re happy to walk you through the steps of securing your estate.
How an Attorney Can Help
Large sums of money can be at risk if your estate plan not properly formed. Establishing your estate plan with the help of an experienced estate planning attorney can help to ensure the financial outcome you desire for your loved ones. Rather than take the risk of placing your estate in the hands of the government, contact us today for guidance.