Although most people understand the overall goals of an estate plan and may have a vague idea of what needs to be included in a plan, the specific objectives of an estate plan remain a mystery. Not surprisingly, this leads to questions. To help provide some clarity, the attorneys at Wilcox Attorneys, PA discuss some common estate plan objectives.
Protecting and Distributing Assets
Protecting and distributing assets will likely be your first, and most important, estate planning goal. The need to protect assets and the desire to ensure their loved ones get those assets after death is typically what prompts people to create an initial estate plan. A simple Last Will and Testament will ensure that your assets are distributed according to your wishes when you are gone; however, you may prefer to use a trust to accomplish that goal for several reasons. Unlike assets distributed using a Will, trust assets bypass the probate process, meaning they are available to your intended beneficiaries much sooner. Trusts are also frequently used to protect assets from potential threats such as divorce, creditors, and even spendthrift beneficiaries. If you have minor children, a trust is essential because they cannot inherit directly from your estate.
When you think about the possibility of becoming incapacitated, you probably envision someone who is older and suffering from Alzheimer’s disease or other age-related conditions. Though the likelihood of becoming incapacitated does increase during your retirement years, incapacity can strike at any age. Imagine being incapacitated because of a tragic accident tomorrow. Who would make medical decisions for you? Who would take over control of your assets and pay your bills? Who would make personal decisions for you if you cannot make them yourself? Absent an incapacity plan, a judge would have to decide who will make decisions for you and take over control of your assets.
Planning for the Cost of Long-Term Care
You may be too young to be thinking about long-term care at this point in your life; however, the older you get the more likely it is that you will eventually need LTC (“long-term care”). The cost of nursing home care can be staggering, and it will not be covered by basic health insurance or by Medicare. Medicaid can help if you qualify for benefits. Unless you consider the potential need for Medicaid benefits in your estate plan, you could end up losing your retirement nest egg in the process of trying to qualify for those benefits. You want your years of hard work to pay out to your family, not the nursing home.
You may already have a basic retirement plan started. If so, that is great; however, it needs to be incorporated into your estate plan to ensure that the two plans work in harmony with one another. Failing to consider both plans together could result in the loss of significant assets and the payment of unnecessary taxes when you reach your retirement years.
End of Life and Funeral Planning
It may not sound like something you want to spend time considering, but planning ahead for a funeral, burial, or end-of-life care accomplishes several important goals. Executing an advanced directive ensures that your wishes about end-of-life medical care will be honored. Planning your own burial and funeral also ensures that your preferences and wishes will be honored when the time comes. Ultimately, it takes the emotional and financial stress off loved ones who will be grieving your loss.
Contact a Fayetteville Estate Planning Attorney
For additional information, please give us a call or sign up for one of our FREE estate planning webinars. If you have additional questions or concerns about estate planning, contact Wilcox Attorneys, PA by calling or texting 479-443-0062 to schedule your appointment today.