A lot of people equate estate planning to the simple act of creating a will. They think that there is nothing else to do, but in fact, this is a misguided notion on multiple levels.
Asset Transfer Vehicles
The first thing that you should understand is the simple fact that a will is not always the best asset transfer method. If you use a will, you would be providing lump sums to the inheritors all at once, and this can be a source of concern in some cases.
There is no asset protection, and there would be no spending safeguards. Plus, the will would be admitted to probate after your passing, and a long and expensive legal process would get underway.
No inheritances would be distributed while the estate is being probated by the court, and it will usually take about eight months at minimum. On the other hand, if you use a living trust to facilitate asset transfers, probate would not be necessary.
You can also control the nature of the distributions. When you are drawing up the trust, you can instruct the trustee to provide incremental distributions over an extended period of time.
With regard to the trustee, you can use a professional fiduciary that has money management expertise to maximize the value of appreciable assets. Resources in the trust would be protected from the beneficiary’s creditors, and this is another advantage.
The revocable living trust is a highly effective tool that is the right choice for many people, but it is not the only type of trust that can be used. You should work with an estate planning attorney from our firm to gain an understanding of your options so you can make informed decisions.
Letter of Final Instruction
The executor or trustee that will administer your estate will have many tasks to complete, and they will need your assistance. You will not be around to guide them in person, but you can leave the relevant information in a letter of final instruction.
We are talking about the location of hard copy documents, keys, lockboxes, access codes, contact information for parties that should be notified, and login information for online accounts.
These are a handful of the obvious matters that should be addressed, but you can simply ask yourself what the administrator will need to know and share the information in the letter.
If you decide to use a living trust as your asset transfer vehicle, you should add a pour-over will. You may have property in your direct possession at the time of your passing even if you have a trust, and this document will direct the property into the trust.
The probate court would be involved, but it would be a simple, straightforward, and relatively quick process.
Advance Directives for Health Care
It is important to address the eventualities that may confront you toward the end of your life. Unfortunately, a lot of people become unable to communicate their own medical decisions at some point, and you can use advance directives for health care to record your wishes.
A living will is a document that is utilized to express your life support utilization preferences. Organ and tissue donation designations and comfort care medication choices can be included as well.
Medical situations that are not connected to life-support use can enter the picture when you are incapable of communicating. To account for this possibility, you can name a decision-maker in a durable power of attorney for health care.
Doctors would not be able to discuss your condition with your agent because of HIPAA regulations, so you should sign a HIPAA release to open up the line of communication.
Over 30 percent of the oldest old contract Alzheimer’s disease, and this is not the only cause of cognitive impairment. If you have a living trust, you would act as the trustee while you are alive, and you can name a disability trustee to assume the role in the event of your incapacity.
If you are not using a living trust, you can name a financial decision-maker in a durable power of attorney for property.
Schedule a Consultation Today!
We are here to help if you are ready to work with a Hilton Head, SC estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 843-815-8580.