Category: Estate Planning

A lot of people think that estate planning is easy. After all, you just have to create a will, and you can draft that on your own, right? The answer depends on your circumstances, but the process isn’t as straightforward as it seems.

In fact, you might need several estate planning vehicles to bring your vision of the future into reality. But even then, can’t you just turn to online resources and templates to assist you? We strongly discourage you from doing so, as engaging in do-it-yourself estate planning can be extremely risky.

Why you should avoid DIY estate planning

A quick Internet search can return thousands of results that appear to provide you with guidance when it comes to creating an estate plan. However, these resources may not be as helpful as you think. Here are some of the risks of relying upon them to create your own estate plan:

1. Missed opportunities: Many online resources provide you with surface level information. If you rely upon them, then you might miss significant opportunities that give you, your estate, and your loved ones a financial advantage. It’s not about making your estate plan more complicated. It’s about creating the plan necessary to achieve your goals and protect your interests.
2. Increased expenses: A lot of people skip formal estate planning assistance because they think that it’s an easy way to save money. But if your DIY estate plan ends up being challenged, then your estate will incur far more costs than you would’ve seen if you had created your estate plan the right way to begin with.
3. Missed modifications: The estate planning process isn’t something you just do once. Instead, you need to revisit your estate plan regularly to ensure it still suits your needs. Online guides and resources might lead you astray when you want to change your estate plan to better suit your needs.
4. No assistance with disputes: If you create your own estate plan, and it’s subsequently challenged in probate court, then you’ll be on your own to protect your interests unless you decide to hire an attorney at that point. But if you have an attorney assist you with your estate plan from the get-go, then you’ll have dispute assistance from the jump. This can better position you to avoid costly legal disputes that are harmful to your estate and your familial relationships.
5. Uncertainty: After creating an estate plan on your own, you might be left with an unsettling feeling that you’ve missed something. That lack of reassurance can leave you on edge, worried that your estate plan won’t hold water when the time comes for your assets to be distributed. If you work with a legal professional to build your estate plan, though, then you can rest easy knowing that your plan was drafted in accordance with the law and is better protected against future legal issues.

The way in which you craft your estate plan can have profound implications for the future of your assets and your loved ones. There’s simply too much at stake for you to leave these issues to chance. That’s why it’s a good idea to educate yourself on the estate planning process as much as possible, while also seeking the proper guidance you need to craft a proper estate plan. So, if you’d like to learn more about how to build your vision of the future so that it can become reality, then now is the time to start the estate planning process.

Setting up a will is a wise decision. With a will in place, you have the peace of mind knowing that your assets will be distributed according to your wishes after you pass away.

You might consider some other documents to complete your estate plan. While a will covers what happens after you pass away, what happens if you become unable to make decisions while you are still alive?

A power of attorney takes care of this issue. This is a legal document that allows a third party, known as your agent, to act on your behalf if you become incapacitated or otherwise unable to make certain decisions for yourself.

While a will takes effect upon your death, a power of attorney becomes effective when or if you become incapacitated. Once you pass away, the power of attorney is void.

How a power of attorney can help

There are many benefits to having a power of attorney. It relieves your family members and loved ones of the burden of wondering what you would like done in difficult situations, such as if you are on life support or require a life-saving technique to be performed, such as CPR.

Additionally, a power of attorney prevents disputes among family members about who should make this decision since the person was designated well in advance.

Without a power of attorney, an Oklahoma court will likely appoint an agent for you. This could be someone you would have never wanted to make decisions for you or someone you barely know.

There are two types of powers of attorney available. Both serve different functions.

Medical power of attorney

A medical power of attorney allows your agent to make major medical decisions on your behalf. As in the above examples, your agent would communicate your wishes in situations involving major medical decisions.

It is important to note that a medical power of attorney is not meant for minor medical procedures or decisions. Whether to take you off life support or amputate a limb are appropriate matters for a medical power of attorney; whether to undergo minor surgery or have a yearly exam are not.

Financial power of attorney

A financial power of attorney allows your agent to make financial decisions and keep your financial affairs in order if you are incapacitated. Your agent makes sure that your bills and taxes remain paid and

Your powers of attorney can be short-term. You can designate someone as your financial power of attorney if you are going to be unable to take care of your finances for a certain period, such as if you are overseas without access to your accounts.

Likewise, a medical power of attorney generally becomes active when you become incapacitated or a determination is made that you cannot make or communicate medical decisions yourself. If you are later deemed competent and can communicate, the power of attorney becomes void again.

Although having a power of attorney can be a good idea, selecting an agent is a major decision. Your agent should be someone you trust to make these major types of decisions for you. You should give this decision plenty of thought.

Even if you’re healthy now, there’s a strong chance that you’re going to need long-term care at some point in the future. In fact, some studies have shown that as many as 70% of those age 65 and older will need some sort of long-term care in their lifetime.

This care can be extraordinarily expensive, too, quickly eating away at the wealth that you’ve worked hard to accumulate. And if you don’t work to protect your assets, then your long-term care can prevent you from leaving assets to your loved ones, thereby disrupting the initial vision of your estate plan.

Fortunately, you don’t have to let that happen. You can engage in thorough estate planning that allows you to protect your assets for your loved ones’ use while still securing the support you need to pay for your long-term care. But how do you do that? Let’s take a closer look to get you started.

Estate planning to protect your long-term care needs

You have a lot of estate planning options. But if you want to shield your assets while protecting your ability to secure funding for long-term care, then you need to exercise care. One way to do that is to reduce your assets to the point that you qualify for Medicaid. Here are some ways to do that:

• Spend down assets: Medicaid has a five-year lookback period. This means when you apply for Medicaid coverage, the government is going to look at your assets and financial transactions to see if you just quickly and recently got rid of assets to meet eligibility requirements. If they find that you did so during the five years proceeding your application, then you’ll likely be denied coverage. If you can spend down your assets prior to the five-year lookback period, though, then you’re more likely to be in the clear for coverage purposes.
• Use a Medicaid asset protection trust: This trust allows you to remove assets from Medicaid eligibility considerations while still protecting them. For example, if you place your residence in the trust, then ownership will transfer over to the trust, but you’ll still be able to reside in the home. Some assets aren’t transferrable to this type of trust, though, so you may have to liquidate some of them to properly fund the trust. Just keep in mind that this type of trust is irrevocable, meaning that you can’t remove assets from the trust once they’re placed inside of it.
• Use long-term care insurance: A long-term care insurance policy might be able to help you cover some of the expenses that you experience from a nursing home or other long-term care stay, but there are a lot of nuances to these types of policies. So, be sure to have a full understanding of what your policy can and can’t do for you.
• Utilize an annuity: Through an annuity, you receive regular payments based on a premium that you’ve paid. Because you reduced your assets by paying the premium, you might then qualify for Medicaid given that the periodic payments received through the annuity will be spaced out enough so as to not impact your eligibility.

Figure out the best way to protect your potential need for long-term care

There’s a lot that goes into the estate planning and long-term care planning process. And you have to competently navigate all aspects of your plan if you want to protect your access to needed healthcare and shield your assets for your loved ones’ benefit. If you need help figuring out the best way to do that in your unique set of circumstances, then now is the time to get to work learning more about the process and the tools available to you.

It’s taken you decades to build your wealth. While that gives you the opportunity to share your money with your loved ones, it can also create worry that your years of hard work will be quickly wasted away by those who don’t appreciate what you’ve given to them.

This is a legitimate fear held by many who engage in the estate planning process, but you don’t have to sit back and allow your assets to be squandered. You can take control of your estate plan to ensure that your assets, and your loved ones, are protected in the long-term as you see fit.

Of course, to successfully do so, you’ll have to engage in effective estate planning that looks at creating longevity and security. That might sound challenging to do, and it is to a certain degree, but there are several estate planning vehicles that can help you along the way.

Trusts you can use to ensure your estate assets last

The number of estate planning tools that you can use can quickly become overwhelming. But you can choose those estate planning options that are right for you simply by reading up on what each of them can and can’t do for you. Here are some that you might want to consider if you’re looking for estate planning vehicles that will ensure asset longevity:

• Spendthrift trust: This trust releases assets incrementally so that a beneficiary can’t spend away the assets too quickly. This provides support to your named beneficiary while protecting estate assets from misuse and the beneficiary’s creditors.
• Discretionary trust: Similar to a spendthrift trust, this estate planning tool allows assets to be released as deemed appropriate by the trustee. Given that the trustee has control over when and how assets will be disbursed, you’ll want to choose someone you trust to act in that capacity.
• Incentive trust: Here, assets are held in the trust until an identified triggering event occurs. That event could be the birth of a child, graduating from college, holding a full-time job for a specific period, or completing some sort of substance abuse treatment program. You have a lot of room to use this trust as you see fit, which can drive your loved one to make smart decisions while protecting your assets until your beneficiary is ready to receive them and use them in a responsible fashion.
• Generation-skipping trust: As its name implies, this trust allows assets to skip over your children to be inherited by your grandchildren. This has tax advantages, but it also allows your assets to support your family in the long-term without risk of them evaporating within one generation.
• Remainder trusts: With this type of trust, an initial beneficiary is supported by the trust’s assets, and anything remaining in the trust at the time of the beneficiary’s death is distributed to a second named beneficiary. This adds a bit of longevity to your estate’s assets.

Create the custom-tailored estate plan you want

These are just a few of the ways that you can develop an estate plan that ensures your assets will last long-term. There are several other options that you can utilize to bring your vision of the future into reality. You simply have to know what’s out there for you to use and how to implement them into a cohesive plan.

That can be stressful to think about as you navigate daily life, but it’s not something that you have to be overwhelmed by. You can find support in developing your estate plan so that you can put your mind at ease knowing that your affairs are in order.

Even if you’ve worked hard to build up your wealth with the intent of leaving it all to your family, without effective estate planning, your assets can be quickly gobbled up by hungry creditors. This can leave your loved ones without the support that they need and that you intended for them, which is nothing short of tragic.

Fortunately, if you take the time to create a detailed, thorough, and effective estate plan, then you can shield your wealth from creditors. To get to that point, though, you need to know what options are available to you. Let’s delve into some of them so that you can start thinking about what sort of estate plan is right for you.

Estate planning vehicles that can shield your wealth from creditors

You have options when it comes to protecting your wealth from creditors. Here are some of the most commonly utilized estate planning vehicles that could help you do just that:

• Irrevocable trusts: Through the establishment of one of these trusts, you transfer ownership of the assets to the trust, but you also can’t reverse the transaction. Since you’ve completely relinquished ownership of the assets placed into one of these trusts, creditors lose the ability to reach those them. There several types of irrevocable trusts you can use, too, including a spendthrift trust and discretionary trust to limit the release of assets, a special needs trust to care for a loved one with medical needs, and a charitable remainder trust to support a cause in which you believe.
• Accounts with pay-on-death provisions: Several accounts allow you to name a beneficiary to whom assets will be paid once you pass away. This creates a direct transfer of wealth, oftentimes unimpeded by creditors’ reach. Checking, savings, and individual retirement accounts can be subjected to these provisions. It’s worth noting, though, that some of these assets could be claimed by creditors in probate court, but they have a lot of leg work to successfully do so.
• Lifetime gifting: While you’re still alive, you can transfer up to $17,000 a year to each individual. This gifting is exempt from taxation and outside the reach of creditors. It also allows you to see your loved ones enjoy your wealth while you’re still around.
• Certain business structures: Another option is to transfer some of your wealth to a newly created business, such as a family limited partnership. Since these assets then become owned by the business and the partnership, it becomes much more difficult for your individual creditors to reach them.

As you can see, there are a lot of different approaches you can take to try to protect your wealth from creditors. By doing so, you can ensure that those assets are passed down to your loved ones just as you envisioned. That said, this process isn’t automatic, so you need to be proactive in developing the estate plan that’s right for you and your family.

Do you need further guidance in the creation of your estate plan?

If so, then take comfort knowing that help is available. There are a number of resources online to help give you a basic foundation of what to expect and what to look for when creating an estate plan, but we discourage you from trying to create an estate plan on your own, as the DIY process can be fraught with dangers that can threaten the legal viability of your plan.

So, if you’re ready to get started on your estate plan, then now is the time to read up on the process and look for any additional assistance that you may need. We hope that our blog and rest of our website will prove beneficial in that regard.

When you’re younger, it’s easy to see death as a far-off event. As a result, many young people think that they don’t need an estate plan. But this can be a tragic mistake that carries tremendous implications for your assets and your loved ones. That’s why this week on the blog we wanted to look at some top reasons why young adults shouldn’t procrastinate in creating a holistic estate plan.

Top reasons why young people need estate plans

There are a lot of benefits to the estate planning process. Here are some of the most important as they pertain to younger adults:

1. Specifying care for your children: People with children often focus their estate plan on what’s best for their kids. While this certainly includes figuring out asset distribution, it can also entail specifying who will take care of your children if you pass away when they’re still minors. Through an estate plan, you can name the future guardian or guardians of your children, which will prevent any fighting that might occur if you otherwise pass away without clear instruction.
2. Planning for a medical emergency: Even though you might be healthy now, everything can change in the blink of an eye. A car accident or the sudden onset of a medical condition can leave you unable to make important decisions for yourself. Under these circumstances, you’ll want someone you trust to make health care and financial decisions in your best interests. You can achieve this by creating a health care directive and a power of attorney as part of your estate plan.
3. Handling your digital assets: As time goes on, more portions of our lives have become digitized. You might have money stashed away in cryptocurrency or in online payment systems like Venmo, and you also probably have sentimental assets like pictures and videos that have been uploaded onto various social media platforms. You need to ensure that someone you trust can access these digital assets and appropriately handle them when the time comes. That’s why you’ll want to specifically address these assets in your estate plan.
4. Distributing assets: It may not seem like you have many assets, but you probably own things that are important to you. This might include your car, your home, or even your pet. You shouldn’t leave these items without protection. By creating a solid will or using a trust, or some combination of the two, you can ensure that those assets are well taken care of after you’re gone and that your loved ones are adequately supported.
5. Considering debts: If you have a lot of debt, you might want to find ways to shield your assets from creditors as much as you can, so that more of your assets pass down to your loved ones. An effective estate plan may be able to help you do just that.

Start planning now

As you can see, there are a lot of benefits to estate planning, even when you’re young. Although the process can feel overwhelming, we think you’ll find the process much easier once you educate yourself about the process and learn more about the estate planning tools at your disposal.

Hopefully, then you can make the fully informed decisions that are right for you, your estate, and your loved ones. So, if you want to learn more about the estate planning process and what it can do for you, don’t hesitate to reach out for the resources you need.