Estate planning is one of the most important financial tasks we take care of, yet it’s also one many people put off. By planning ahead and having the right documentation in place, you can ensure your assets are distributed according to your wishes after you pass away. A family lawyer can guide you through the estate planning process and help provide peace of mind for both you and your loved ones.
Estate planning isn’t just about wills – it’s about comprehensively planning for your future and your family’s future. With the help of a family lawyer, here are 5 key ways they can assist you with your estate planning needs.
Create a Will
Perhaps the most fundamental estate planning document is a last will and testament. A will allows you to designate who will inherit your property after you die. It also allows you to name guardians for any minor children. Without a will, state law determines how your assets are distributed – which may not align with your intentions. Your family lawyer can draft a customized will for your specific situation. They’ll discuss details like how you want to inherit your personal belongings, investments, real estate properties, and more. The will should also name an executor who will be responsible for carrying out the instructions in your will. Having an experienced lawyer draft your will helps ensure its legally valid and avoids potential challenges after you pass.
Establish a Trust
For larger or more complex estates, a family lawyer may recommend setting up a trust. A trust is a legal entity that holds assets for the benefit of another party, such as heirs. There are several types of trusts that can serve different estate planning purposes including a revocable living trust, testamentary trust, and credit shelter trust. Your family lawyer can help you determine if a trust makes sense for your situation, and then prepare the appropriate trust documents tailored to your objectives.
Plan for Medical Scenarios
No one wants to think about becoming incapacitated, but advanced medical directives are essential documents your family lawyer can assist with. This includes naming a trusted agent to make medical decisions if you’re unable to do so yourself through a healthcare power of attorney and expressing your preferences for life-prolonging treatments if terminally ill or permanently unconscious in a living will.
Consider Asset Protection
Part of estate planning involves protecting your assets both during your lifetime as well as after death. Your family lawyer has expertise in strategies like transferring high-risk assets like a home or business to an LLC or other legal entity for liability protection, titling real estate with rights of survivorship or transferring to a living trust to avoid the expense and delays of probate, and utilizing exemptions like transferring $15,000/year gift tax-free to take advantage of lifetime gift/estate tax credits.
Prepare for Tax Implications
Taxes are a major consideration in estate planning. Your family lawyer understands the applicable gift, estate, generation-skipping transfer, and income tax rules so they can structure your plan accordingly, such as bunching gifts over several years to maximize lifetime gift tax exemptions, dividing an estate among multiple generations to minimize generation-skipping transfer taxes.
