What is Estate Planning anyway?
Most people need to plan out their estate at some point, but many believe that estate planning just means deciding who will get the things they own when they die. While estate planning does include deciding how to leave your worldly possessions, that’s not the whole picture. A complete estate plan includes planning for events before death (like what to do if you’re alive but unable to act for yourself), and events after death (including funeral arrangements, naming guardians for young children, distributing your property and more).
However, possibly the main reason why individuals decide to purchase an estate plan is to avoid the cost of probate. Probate is a court process that orders distribution and settlement of your estate. Probate is a lengthy process, sometimes taking several years to distribute assets to your heirs. Additionally, the cost of probate is generally much higher than preparing an estate plan, and is deducted directly from your assets.
So, while the purposes of estate planning are varied, the actual process of estate planning is primarily only two steps. First, an attorney will draft the documents for you after careful analysis of your planning needs. The attorney may consult with tax and financial experts to provide you with a plan that achieves you or your family's goals.
For most families and individuals an estate plan will include the following documents:
Revocable Living Trust
Certificate of Trust
Last Will and Testament
Financial Power of Attorney
Healthcare Power of Attorney
Second, is the process of funding. Several of your estate planning documents are meaningless unless the chief document, your revocable living trust, is funded with assets from your estate.
All the property that a person owns is part of his or her estate. Your estate includes everything you own less all of your liabilities. An estate can include a house, land the house is built on, cash, bank accounts, retirement accounts, stocks, bonds, clothes, jewelry, tools, cars, musical instruments, and other items.
Funding requires the property in your estate to be re-titled into the name of the trust. Most assets can be transferred into the trust without adverse tax consequences, but if you have some unusual assets, you should check out the tax effects.
To learn more about how Agave Law can help you and your family achieve their estate planning needs, call our office today to set up a free consultation (702) 909-2462. Don't wait until something goes wrong or else it might be too late to take advantage of all the incredible benefits that estate planning offers. The only time that you can prepare and implement an estate plan is while you are alive and you are capable of entering into a contract. There's no guarantee you'll have time down the road.