Ralph Petley-Jones specializes in estate planning and has more than 25 years’ experience with a wide range of client backgrounds and familial situations, estates large and small. He has acted as executor, attorney, and / or health care representative for some clients, and has helped other clients act for their own family members. His goal is always to apply his knowledge and experience to helping clients devise an estate plan that maximizes the benefits to them and minimizes the hassle to their families.
What is meant by the word "estate"?
The word "estate" means different things to different estate planning professionals: to your financial planner, "estate" means the financial assets that you own or control; to your tax advisor, it means your net worth and its tax implications, and to your lawyer, it generally means assets that are dealt with inside the Will and therefore require probating your estate.
Read more about What is Meant by 'Estate'?
What is estate planning?
Estate planning is the process by which you make arrangements for the handling of your health care, your affairs, and your property (assets), should something happen to you, be it physical or mental incapacity or death.
An estate plan has both a financial and a personal side. On the financial side, a good estate plan sets out what happens to your home, your investments, your business, your life insurance, and any other property, at the same time minimizing taxes and fees both during your lifetime and upon your death.
On the personal side, a good estate plan includes directions to carry out your wishes regarding your health care during your life and the handling of your remains and your personal belongings upon your death.
It is important that the financial and personal sides of your estate plan integrate well and are legally effective. If your estate plan is not legally effective, the people you have chosen to take care of things for you might not be able to carry out your wishes. To this end, it is very important that you obtain professional advice, both from a lawyer and a financial planner and / or tax advisor with extensive estate planning experience. A simple, hand-written set of instructions to your spouse or children simply will not do.
Why do I need an estate plan?
The most important reason for you to have a legally effective estate plan is to ensure that others know your specific wishes with regard to your health care and your property, and are able to act as you have directed. At the same time, you minimize the stress for those who have to deal with you or your assets, and you spare them what can be considerable expense.
Read more about Why You Need an Estate Plan.
What do I need in my estate plan?
An estate plan consists of all the documents that set out instructions regarding your health care, your affairs, and your property should you become incapacitated physically or mentally, or die. They include the following:
- A representation agreement for health care, in which you appoint one or more people to make decisions regarding your health care in the event you are unable to make them yourself. The representation agreement can also include a so-called “living Will,” which expresses your wishes regarding providing or stopping treatment should you suffer permanent incapacity.
Read more about Representation Agreements.
- One or more powers of attorney, in which you appoint one or more people to act for you regarding any financial matter in the event you are unavailable, or unable, to do so yourself. The ability of your appointee to act under the power of attorney ceases at your death.
Read more about Powers of Attorney.
- A Will, in which you appoint one or more people to distribute your assets according to the specific instructions laid out in the Will. The ability of your appointee to act under your Will commences only upon your death.
Read more about Wills.
- Property transfers, in which you, for example, set up joint tenancy on your bank account or house during your lifetime, so that the asset is automatically transferred to someone upon your death, which reduces substantially the probate fees applied to your estate. The creation of trusts and life estates allows for the distribution of assets during you lifetime and might be called for if your situation is particularly complex.
Read more about Joint Tenancy.
When do I need to prepare my estate plan?
If you have assets that you care about, a spouse and / or children you support, or specific wishes concerning your health care in the event that something happens to you, you need to act now. Procrastination is your worst enemy. Though you might not like to think about something happening to you, things do happen, even to people of relative young age. Wouldn’t you and your family rest more easily knowing that you have everything in place just in case?
Read more about Procrastination.
You should also be aware that documents of any kind cannot be prepared for you if there’s any question as to your legal capacity, that is, your ability to understand the legal documents you will need to sign. The best time to start an estate plan is now, while you have the capacity to do so.
How do I get started?
The first thing you should do is make an appointment with a lawyer whose preferred area of practice includes estate planning. It is his or her job to work with you to determine the best plan for your particular situation, so don't lose sleep trying to figure it all out before your appointment. Bring your ideas, but be prepared to be flexible, because unless you are an expert on estate law yourself, you cannot know all the possible legal consequences of your preconceived plan.
Once your lawyer is fully aware of your particular familial situation and the extent of your property, he or she may suggest you also see a financial planner and / or tax advisor.
There are certain kinds of information you need to gather together to bring to your appointment, however, so that your lawyer can do the best possible job for you. Read more about Preparing for Your Estate Planning Appointment. If you already have your documents, read more about what to do After Your Documents Are Signed, and If You Are a Surviving Spouse.
How can I be sure my wishes are carried out?
First, there is a great deal of trust involved in appointing people to handle you or your affairs, in life and after your death, so of greatest importance is to choose your appointees carefully. There is some recourse through the courts by others not appointed, should there be any concerns that arise about how things are being handled by your appointees, but in general it’s a good idea to discuss your wishes with various members of your family.
Second, if you are making new documents and are concerned about copies of old Wills or other estate planning documents in the wrong hands, the documents can be registered. Read more about Registering Estate Planning Documents.
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