What is Estate Planning and Who Needs It?
One of the most fulfilling parts of my job is to help individuals and families gain peace of mind by helping them effectively plan their future and beyond.
Estate planning is an essential part of my practice and I have helped hundreds of people with their estate planning needs, Wills, Powers of Attorney, Healthcare directives and Special Needs Trusts and other forms of Trusts. I often get the question what is estate planning and when one should start the process.
Estate planning is the collection and preparation of documents that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. It is your opportunity to choose who you would like to make decisions for you should you be unable to make those decisions yourself; and choose the people you would like to take care of your estate when you are gone.
Most estate plans are set up with the help of an attorney experienced in estate law. At my firm, we have helped hundreds of people set up their estate planning documents. Estate planning is an ongoing process and should be started as soon as one has any measurable asset base or dependents. As life progresses and goals shift, the estate plan should move to be in line with new goals and be revised. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run higher than 40%), so at the very least a will should be set up even if the taxable estate is not large.
Additionally, it is very important for new parents to start planning their estate so that they can protect their newborns. Estate planning can allow the parents to choose guardians for their minor children so that the people they trust and love can take care of them. Furthermore, parents can set up trusts for their children so that they are financially taken care of should something happen to the parents.
Another essential part of estate planning is Powers of Attorney. A financial power of attorney will allow the people you trust and choose to make decisions for you financially and handle your finances should you be incapacitated or unable to while still living; think commas or disabilities. A medical power of attorney, will allow the people you choose and want to make important medical decisions for you if you are still living, but unable to make such decisions. This is crucial for most as it can alleviate a huge amount of stress and family dramas. It’s like planning to still be in control for when you know you are not going to be in control. We can also help you draft your healthcare directive which will list your medical wishes and tell your doctors what you want or don’t want happening to you should you be in a vegetative state.
Some of the major estate planning tasks include:
- Creating a will
- Limiting estate taxes by setting up trust accounts in the name of beneficiaries if necessary and beneficial
- Establishing a guardian for living dependents
- Naming an executor of the estate to oversee the terms of the will
- Creating/updating beneficiaries on plans such as life insurance, IRAs and 401(k)s
- Setting up funeral arrangements
- Establishing annual gifting to reduce the taxable estate
- Setting up durable power of attorney (POA) to direct other assets and investments
- Setting up medical power of attorney so the people you trust and want make medical decisions for you if you are incapable of doing so
- Setting up a Healthcare Directive
- Setting up trusts for dependents with Special Needs so that the dependents may still qualify for state or government programs
My firm serves all of King and Snohomish County. If you are considering setting up your Estate Planning documents or have any questions feel free to contact me at 425-806-1500.