If you are new to estate planning, you probably have a number of questions about what should be included in your estate plan and how the process of creating an estate plan is typically handled. Estate planning is a highly individualized process because of the personal, even sensitive, nature of the issues involved in creating an estate plan. When done properly, an estate plan should reflect your unique estate planning goals and objective as well as address any personal concerns or worries you have. There are, however, some goals and objectives that are frequently found in the average estate plan. To help you get started with your initial estate plan, the estate planning attorneys at Hedeker Law, Ltd. explain the five most important estate planning components and why you will likely want to include them in your estate plan.
- Asset Protection and Distribution – for most people, this is the first, and most important, estate planning goal. The need to protect assets and the desire to decide what happens to those assets after death is typically what prompts people to create an initial estate plan. A simple Last Will and Testament will ensure that your assets are distributed according to your wishes when you are gone; however, you may prefer to use a trust to accomplish that goal for several reasons. Unlike assets distributed using a Will, trust assets bypass the probate process, meaning they are available to your intended beneficiaries much sooner. Trusts are also frequently used to protect assets from potential threats such as divorce, creditors, and even spendthrift beneficiaries. Finally, if you have minor children, a trust is essential because they cannot inherit directly from your estate.
- Incapacity Planning – when you think about incapacity you probably think about Alzheimer’s disease or other age related conditions. Though the likelihood of becoming incapacitated does increase during your retirement years, incapacity can strike at any age. Imagine being incapacitated as a result of a tragic accident tomorrow. Who would make medical decisions for you? Who would take over control of your assets and pay your bills? Who would make personal decisions for you if you cannot make them yourself? Absent an incapacity plan, the answer to these questions is that a judge would have to decide who to appoint to make decisions for you and take over your assets.
- Medicaid Planning – you may be too young to be thinking about long-term care at this point in your life; however, the older you get the more likely it is that you will eventually need LTC. The cost of that care can be staggering and it will not be covered by basic health insurance nor by Medicare. Medicaid can help if you qualify for benefits. Unless you plan ahead, however, you could end up losing your retirement nest egg in the process of trying to qualify for those benefits.
- Retirement Planning – you may already have a basic retirement plan started. If so, that is great; however, it needs to be incorporated into your estate plan to ensure that the two plans work in harmony with one another. Failing to consider both plans together could result in the loss of significant assets and the payment of unnecessary taxes when you reach your retirement years.
- Funeral, Burial, End of Life Care Planning – it may not sound like something you want to spend time considering, but including funeral and burial as well as end of life care into your comprehensive estate plan accomplishes several important goals. Executing an advanced directive ensures that your wishes with regard to end of life medical care will be honored. Planning your own burial and funeral also ensures that your preferences and wishes will be honored when the time comes. Finally, it takes the emotional and financial stress off of loved ones who will be grieving your loss and not in apposition to make good decisions at the time.
Contact Estate Planning Attorneys
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding the creation of your unique estate plan, contact the experienced estate planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.