What is an Estate Plan?
You can go your entire life without worrying about most areas of the law. However, absolutely everyone needs to address their estate plan. When most people hear the term "estate plan", they think about a bunch of legal documents. However, your estate plan goes beyond paperwork. In the broadest sense, your estate plan is comparable to a blueprint. It represents an outline for how various preparations can help you achieve your goals in life as well as protect you and your loved ones from life's risks. Imagine trying to construct a skyscraper or build a bridge without a blueprint. It would inevitably end in disaster. Unfortunately, the same outcome can occur when you try to proceed through life without a comprehensive estate plan.
Despite the importance of having an estate plan, a large number of people fail to make one. According to a recent survey only 57 percent of adults in the United States have an estate plan, on average. That percentage decreases to a measly 21 percent for adults in the 18 to 34 age range. These statistics should not surprise us, though, because creating an estate plan can present an incredibly difficult task without proper guidance. Creating an estate plan requires you to make a lot of big decisions and consider a lot of difficult scenarios, which can easily overwhelm you.
Why You Need an Estate Plan
Some people think you only need an estate plan if you own a lot of property. Nothing could be further from the truth. Estate plans can vary in complexity and can accomplish a number of different goals. However, at a basic level, an estate plan helps prepare you for the major risks in life. The main risks include:
- The possibility that you could pass away without making plans for the disposition of your property and, if you have children, arrangements for their care, and
- The possibility that you could become incapacitated without anyone legally authorized to make decisions on your behalf.
These risks are universal; therefore, absolutely every adult, regardless of age or wealth, needs some form of an estate plan.
The best way to demonstrate the necessity of an estate plan is to show you what happens without one. For example, an estate plan allows you to control the disposition of your property when you pass away. If you pass away without an estate plan, then the State of Georgia will decide who receives your property instead of you (according to our laws of intestacy). Related FAQ:
What is Intestate
Succession?This disposition of property may not be practical, tax efficient, or consistent with your wishes. If you have minor children, an estate plan also allows you to decide who cares for them by nominating a testamentary guardian. If you do not have an estate plan, a judge will make this incredibly important decision instead of you. Also, in your estate plan, you can appoint someone you trust to control your property or make your healthcare decisions in case you become incapacitated. If you do not have an estate plan, then your loved ones would have to endure a long and expensive court case just to make these decisions on your behalf.
What Documents does an Estate Plan Include?
Although every estate plan is unique, several core documents play a role in nearly every plan, including:
- Last Will and Testatement: A Will is your formal declaration for who should receive your property after you pass away. Once your Will has been entered into probrate, it provides the legal means for transferring that property. If you have young children, you can also appoint the individuals who will care for them and manage their property in your Last Will and Testament.
- Advance Directive for Healthcare: An Advance directive allows you to appoint individuals who you want to make your healthcare decisions and consent to medical treatment on your behalf if you cannot communnicate with your doctors. In your Advance Directive, you can also express your end-of-life preferences, which used to be done in a separate document called a Living Will.
- Durable Power of Attorney: A Durable Power of Attorney allows you to appoint someone to make virtually any decision on your behalf relating to your property, finances, taxes, and insurance. You get to decide how narrow or broad you want this power to be and also when you would want this power to go into effect.
As the goals you seek to achieve become more complex, so do the components of your estate plan. The majority of estate plans incorporate trusts in some form.Related FAQ:
What is a
Trust? Trusts are fiduciary arrangements for the ownership of property that allow you to exercise greater control over it. A trust may serve as the primary vehicle for managing property in your estate, such as a Revocable Living Trust, or it could play a more limited role, such as a contingent trust for minors.
What is Our Estate Planning Process?
We follow a three-step process in creating your estate plan. Each of these steps is carefully timed so that we can typically complete your estate plan in a matter of weeks:
- Consultation: The estate planning process begins by getting to know more about you. We provide free consultations to give you the opportunity to meet at our office and see how we can help. Prior to this meeting, we ask you to complete a questionnaire to gather some information. So many factors can have an impact upon your future that we need to consider as much information as possible, including details about your finances, health, and family dynamics. Most importantly, we need to learn about your goals and concerns, which serve as the guideposts for your plan.
- Design: Once you are ready to begin your estate plan, we need to determine the best course of action for you. There is no such thing as a "one-size-fits-all" estate plan. The individual components of a plan will depend entirely upon each client's needs. Our job is to craft a plan that accomplishes your goals while staying within the level of complexity and budget you are comfortable with. Many times, we can address these decisions in our initial consultation, but other times we schedule a separate design meeting.
- Delivery: The end result of the estate planning process takes several forms. The tangible product you receive is a portfolio of estate planning documents, but it doesn't end there. In most cases, we also take a hands-on role in implementing your plan, such as by retitling assets or transferring property into trusts. When your life changes, we're also available to provide any updates to your estate plan that become necessary.
What You Need to Know about Estate Planning
To guide you through the estate planning process, we have prepared some articles with background information you can review before scheduling your free consultation.
The Problems with Probate
This article provides more information about the probate process and the potential problems that can arise.
Revocable Living Trusts
If the probate process concerns you, learn more about the main alternative to an estate plan based upon a Last Will and Testament for most people.