What is Estate Planning? Estate Planning Overview by Rex Crandell

WHAT IS ESTATE PLANNING?Show more

It can include a variety of strategies and documents. If you have a lot of assets, then you may need to use procedures to avoid or defer estate taxes. If you own real estate, you likely will need a revocable living trust to avoid probate. If you are just starting out in life and have not accumulated many assets yet then a simple will might be a viable option. Estate Planning always needs to address your particular circumstances and location on the human life cycle continuum. No "packaged" or generic estate plan should be considered, unless you think of yourself as a "Generic Person". Your estate must directly fit your particular circumstances or it is not worth the paper that it is printed on. Common Estate Planning instruments are summarized below.

1. Revocable Trust – Your Declaration of Trust document will be the primary instrument to manage and transfer your assets to beneficiaries. One advantage of a revocable trust is that assets that are owned by your trust are not subject to the lengthy and costly probate court procedures.
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2. Last Will and Testament – Your Last Will and Testament. This document is also known as a pour over will because the will direct the executor to add any asset to the trust if it was not listed in the trust at date of death. A will is the only document to nominate care custodians for minor children when both of the child’s parents pass away. As this is a husband and wife estate plan, there will be one (1) Will prepared for husband and a different Will prepared for the wife.

3. Durable Powers of Attorney-Asset Management Your Durable Power of Attorney for asset and financial management document of any asset that is not held in the name of your trust in the event of mental incompetency. Incompetency is when you are no longer mentally able to manage your own finances or assets. This document only goes into effect upon incompetency, as determined by a medical doctor. This document is intended to avoid the burden of a legal court supervised conservatorship in the event you become incapacitated for any reason including Alzheimer’s Disease. Your designated agent can step in and manage your assets that are not titled in the name of your revocable trust. Again, as this is a Husband and Wife estate plan, there will be one document prepared for husband and a separate document prepared for wife.

4. Advance Health Care Directives – An Advance Health Care Directive is designed to allow your Health Care Agent to make decisions in the event you are not able to communicate with your wishes to your health care professionals. There will be one document prepared for husband and a separate document prepared for wife.

5. Transfer of Personal Property. A document to transfer asset that you own to your revocable trust. These assets may not have identifiable proof of ownership certificates. You mentioned that you do not own any real property.

6. Transfer of a Sole Proprietorship Business To transfer asset to your revocable trust (if any).

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