The purpose of estate planning is to prepare yourself and your family for not only your death, but also the possibility of your incapacity. Planning for both possibilities involves creating a comprehensive estate plan. Typically, that would require more than just your last will and testament. Many clients ask: “Do I need more than a will?” The answer is typically – yes.
What is Estate Planning?
Estate planning is more than just drafting a will. Most people are concerned with more than simply making sure their property is inherited by the individuals they choose. Minimizing estate taxes is another concern. But more importantly, planning for the possibility of temporary or permanent incapacity, should be considered. Incapacity planning allows you to provide protection for you and your family, in the unfortunate event you are no longer able to make decisions on your own.
A Will is the most basic estate planning tool. It allows you to leave written instructions describing how you want your estate to be distributed upon your death. The only disadvantage to a will is that it will require your estate to pass through the probate process before your assets will be distributed. Probate can often be a lengthy and expensive court proceeding.
What does a comprehensive estate plan include?
A will is a necessary component of any estate plan. No matter how much the value of your assets may be, having a will ensures that your money and personal belongings will go to the beneficiaries you choose, at your death. Without a will, a disinterested judge will make these decisions for you, based on the laws in your state. But there are other issues that should be addressed in your estate plan.
A comprehensive estate plan should also include instructions for your medical and personal care if you become disabled. It should also name a guardian for any minor children, who will care for them and/or manage their inheritance. Planning for life insurance benefits for your surviving family, disability income insurance if you become unable to work, and long-term care insurance to assist in financing your medical care in the event of an extended illness or injury, is also an important element of estate planning.
Planning for Mental Incapacity
There are different life situations that can lead to incapacity, including medical and mental health conditions. Luckily, some incapacity is only temporary, but it must still be planned for. Planning for mental incapacity requires consideration of both the personal decisions that need to be made, as well as, the necessary financial decisions. If you become incapacitated, without a plan in place, a court-supervised guardianship or conservatorship may be appointed to take care of you. That means you lose all control over how your affairs are handled.
Advance Medical Directive
An Advance Medical Directive, also known as a Medical Power of Attorney in some states, allows you to delegate medical decisions to trusted individuals, in the event you become incapable of making those decisions on your own. Planning for incapacity allows you to choose that person now, while you still have the capacity to do so.
These are just a few examples of other estate planning tools that can be used, in addition to a will, to plan for your future and the future of your loved ones. If you have questions regarding wills, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
- Getting Ready for 2021 - December 15, 2020
- Myths We Tell Ourselves About Estate Planning - October 13, 2020
- Living Trusts Streamline the Estate Administration Process - June 8, 2020
