Wills and proper estate planning can help protect your family and lower the risk of loss to creditors. If you or someone you know is in need of assistance regarding a will or an estate matter or have any questions regarding such proceedings, The Law Offices of Christopher Eads, PLLC, can help. Call 615-622-6060 or request a free consultation online today.
Almost all estate plans include a Last Will and Testament. Most everyone is familiar with what a will is and the effect it has on decisions made after someone passes away. A will is the document that generally directs how you will be buried, who will be the guardian of you minor children, and equally important, how your property is disposed of. Under a will, the property is broken up into two types: real and personal.
Real property consists of things like land and your house while personal property includes everything from your socks to your car. While your will does appoint an executor to administer your property and settle any outstanding debts, it is important to have your will carefully drafted so that you do not place a heavy burden on the executor of your estate, who is generally a family member. Your will needs to give very specific instructions so that the executor is left to guess on what your intentions were.
Other common documents clients want drafted include a Power of Attorney, and a Healthcare Power of Attorney (which is known in Tennessee as an Appointment of a Healthcare Agent). Without these documents, a family member may have to petition a court to be appointed a conservator in order to handle your affairs for which you may not be able to do on your own.
Having a Power of Attorney up front will save your family from having to go to court to get these matters handled. Generally, when people think of a Power of Attorney, they understand that to mean someone else has the ability to handle your financial issues that YOU CHOOSE.
The Appointment of a Healthcare Agent also allows you to choose someone to make critical healthcare decisions if you are unable to do so. The key here is that you can control what happens by having these documents drafted up before it is too late and your family has to undertake additional expenses to be allowed to act on your behalf. Also, this allows you to talk to the person you want to handle these matters and give them instructions on what YOU WANT.
A living trust is a legal document that, similar to a will, contains instructions for what you would like to happen to your assets when you die. Perhaps you want to provide financial assistance to a loved one, aged parents) or a favorite charity. If so, a trust can accomplish this goal. Suppose you are concerned that a beneficiary cannot responsibly manage the money. In that case, a trust can be structured in a way that the beneficiary is not given free access to the funds without the consent of a selected trustee. Unlike a will, a living trust may also be utilized to reduce probate costs and avoid or minimize estate taxes.
Life insurance can add complexities to the estate planning process, and without appropriate planning, approximately 40 cents of every dollar can be lost upon the policyholder’s death. An inexpensive and cost-effective way to fund a trust is using life insurance. Other potential benefits include reducing estate taxes, avoiding probate, and more control over how proceeds are paid out.
Many Americans grow the bulk of their wealth through retirement accounts (e.g., IRAs and 401(k)s). An important factor to consider is what will happen to the remainder of your retirement savings should you die before it is spent. As long as primary and contingent beneficiaries are named, retirement benefits and accounts are not subject to a will. However, when the account’s beneficiary is a trust rather than a loved one, it can help preserve a retirement account’s long-term value by annually distributing benefits to the trust’s beneficiary rather than a lump sum. Additionally, it is also a way to avoid having a lump sum folded into a surviving spouse’s estate for tax purposes, or to finance a trust to benefit a special needs child.
If an unfortunate tragedy were to occur and no will or estate plan is in place, this can create a nightmare scenario for your loved ones who have only just begun to grieve. Your assets will be distributed according to state probate laws and may get tied up in a costly and traumatic court process that can drag out for months or even years. When done right, a will and estate plan that is customized to your needs will protect your loved ones and give you peace of mind.
If you would like to ensure your property and affairs are accounted for and have intended beneficiaries, give us a call today at 615-622-6060 to schedule a consultation. Our Mount Juliet will drafting and estate planning attorneys can help make the process smooth for you.