Wills, Trusts and Estate Planning

When most people think of Estate Planning, they almost immediately think of their Last Will and Testament. And yes, a Will can be a key part of your estate plan, it's only one piece.

Often overlooked or underappreciated are a Durable Power of Attorney for Financial Matters, or Power of Attorney for short, a Health Care Power of Attorney and Living Will. These three documents can be instrumental in helping your loved ones avoid the court system should you become unable to manage your affairs due to illness or Alzheimers. A Power of Attorney names the person or people that you would want to make financial decisions for you should you be unable to act. A Power of Attorney that goes into effect only after you've been declared incompetent by a medical professional is also known as a Springing Power of Attorney. You should discuss whether an open-ended Power of Attorney or a Spring Power of Attorney is more appropriate with your attorney.

A Health Care Power of Attorney names the person or people who would make medical decisions for you if you were unable to act on your own behalf. These can be especially important if you are not married. The medical community will generally defer to a spouse, but HIPPA protections and other liability issues may limit their options if you're key person is not your spouse. A living will goes along with the Health Care Power and allows you to express, in writing, what type of extraordinary measures you'd want if faced with a terminal condition. Do you want to be kept on life support? Receive IV food and/or fluids? Donate your organs? A living will allows you to make these wishes known. 

These three items are also key items for your adult (legally) children, but perhaps still in college or look to you for support. 

Once you have these items in place, you can move onto what happens to your physical possessions. A properly crafted estate plan creates a master plan for handling your property during life and distributing that property at death.

Common estate planning issues addressed in the financial planning process include:

  • Wealth transfer planning involves the smooth transition and distribution of wealth according to your wishes. With proper estate planning, you decide to whom, how and when your assets will be distributed, as well as who will manage your estate or business. Special issues that may be included are:
    • Providing financial security for others. Do you want to leave assets outright or in a trust? 
    • Planning for children from a previous marriage or those with special needs.
    • Equalizing inheritances fairly. We recognize that different family members may have different needs. Being fair versus equal may require special planning depending on your assets,
    • Retiring from your business

This type of planning also involves managing assets during disability or incapacity and may include establishing trusts for you and your family. No matter what circumstances you may face, we can guide you through the process.

  • Minimizing potential taxes without interfering with your other financial goals. If you give away wealth, during life or at death, you may incur federal—and possibly state—taxes. You can help protect the assets you transfer from excessive depletion by understanding these taxes and the various strategies you can use to minimize them. Gifting assets before or after death may have important federal and state tax implications. Understanding and employing smart investment strategies will help you minimize the overall tax burden while maximizing your gifts.
  • Asset protection plans identify your potential exposure to risk and employ preventative tools and strategies to reduce that risk. If you own substantial assets, creditors come in many forms and protection from these creditors can be a concern. Asset protection planning deals with ownership issues, liability insurance, statutory protections, special needs trusts, offshore and domestic trusts, prenuptial agreements, divorce and business dissolutions.
  • Charitable giving may be motivated by both personal and tax incentives. Congress encourages charitable giving through tax legislation that can minimize your income and estate taxes. Charitable planning involves selecting the gifted property and charitable structure that will best meet your needs.

Our process does not end with estate planning but instead coordinates your estate plan with your overall plans for your business, investments, insurance and employee benefits.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult with a tax or legal professional regarding their individual situations.