Estate Planning isn't Just for the Wealthy

Article submitted by Conrad Willkomm, Esq. of the Law Office of Conrad Willkomm, P.A. For additional information, please call 239-262-5303. Or visit us at www.WillkommLaw.com.

You have worked hard to build what you have and now you need to protect it. Having an estate plan is essential to safeguard your loved ones and assets. A complete estate plan covers two fundamental areas. First, after death, it establishes the manner in which your property will be distributed, it names guardians for young children, and it designates the handling of your remains. Second, it nominates and gives direction to an agent to make financial and/or medical decisions on your behalf should you become incapacitated.

Often times, people put off finalizing an estate plan, primarily because they believe it can be done at a later time. However, there is no benefit gained by a delay, and too often, it never gets done, resulting in very expensive and time-consuming legal issues for your loved ones.

In a Last Will and Testament, you name who will be responsible for handling your assets upon your death and you direct to whom your property will be distributed. Through a Will you can also name a guardian for any young children. In addition, a Will is the best place for you to direct how you want your remains handled, whether you want your body buried, cremated, or handled in any other manner. You also want to make sure your Will is up to date. The death of Anna Nicole Smith is a glaring example of how important it is to have a current will outlining your wishes on how you want your remains handled, and who you want to have custody of your children.

Sometimes having only a Will is sufficient. However, a Will still must go through probate. The probate process can cost 3 to 6 percent of your entire probate estate and can take up to 2 years in probate court!!! Certainly, having a Will is better than having no plan at all; however, generally a Will is simply not enough. With a Revocable Trust, you can avoid probate, and upon your death the Trustee of your Trust can act on your behalf by simply producing the original trust and a death certificate, making court intervention unnecessary. Assets in a Revocable Trust are not the only assets which will avoid probate. Accounts where you name a beneficiary, or property that is held in joint tenancy or tenancy by the entirety, will all avoid probate. For this reason, it is important that no assets are left in your name alone, otherwise, all such assets will be subject to probate.

Another important step in your estate planning is the Advanced Directive. The Advanced Directive explains your wishes about medical treatment if you become incapacitated or unable to communicate. Two important examples are the Living Will and the Designation of Health Care Surrogate. The Living Will bears no relation to the conventional Will used to leave property at death. The Living Will is a document that allows you to direct the type of medical treatment you would like to receive if you are unable to direct your own care. Most commonly, this is where a person will direct that life sustaining treatment be withheld if there is little chance of recovery. A Designation of Health Care Surrogate (HCS) is a document where you name a person, called an agent, to make medical decisions for you. People question whether a HCS is necessary because they believe close family members can often times make these decisions if necessary. However, disputes often arise which can lead to additional suffering and medical expenses. A recent horrific example of this is, of course, the Terri Schiavo case.

Another important tool in an estate plan is the Financial Durable Power of Attorney (DPOA).

A DPOA allows you to name someone that you trust to handle your finances should you become incapacitated. This document allows your agent to perform necessary duties such as pay bills, manage retirement accounts and file and pay taxes. If you do not have a DPOA, and you become incapacitated, a guardian must be appointed by the court to handle your finances. This can be a very expensive and time-consuming process and most people would certainly rather designate who will handle their finances.

It is important to remember that all of the documents referenced above are not written in stone and can be changed or updated at any time. Do not put off taking this very necessary step to protect your loved ones and your hard earned estate.