In a very general sense, the estate plan is the coordinated plan of action that supplies needed answers or decision makers when the primary decision maker(s) is incapacitated, unavailable, or deceased. It should be a private process, but a court can supply decisions or decision-makers whenever needed. If there is no clear answer on what should be done with property or who can make property decisions, a Probate Court can provide decisions, but most often delegates decision-making to someone.
1. “I don’t have any/very much assets, do I really need estate planning?
Answer: Yes, and for many reasons. Having current estate planning documents will save you and your loved ones thousands of dollars in attorney’s fees and court costs if you die or are disabled. Personal debt does not disappear at death;it can diminish or complicate even those small assets that you do pass on to your benefactors.
Practical Example: Deceased parent with three adult children owned personal residence and two cars at death, and the value of personal residence requires probate. Parent believes house will be sold and children will split money and do whatever they please with the cars. In this scenario, the potential cost of administration,with or without a Will, usually starts at $3000.00. If the deceased parent had a customized estate plan in place, the potential cost may have been as low as $125.00.
2. “Can I do it myself?”
Answer: It can be done on your own without counsel, but probate lawyers regularly charge thousands of dollars to handle deficient estate plans.
Practical Example: Deceased person wrote on a napkin that everything they own to goes to Susie, calling the napkin their “will.” Several, questions/problems abound: Can it be proved in Court that the deceased actually wrote on the napkin? If they make big decisions on napkins, is there another napkin? Probably the biggest question that complicates the administration is whether Susie will have to pay the debts of the estate first before she gets “everything?”
3.“What affect does my divorce have on my estate plan?”
Answer: A new, separate plan is best. Your final property settlement agreement determines what assets and liabilities are yours post-divorce. A divorced spouse named in document created before the divorce is superseded by the property settlement. However, there is no regulatory body actively policing estates. If your ex is incorrectly named as beneficiary on a life insurance policy, even post-divorce, the policy will pay to them only. Costly litigation is the only chance for re-course, assuming they did not waste the money by the time the case resolves.
Practical Example: After pro-se “take what you got” divorce, husband never removed ex-wife as member of his investment real estate LLC. After husband’s death, bank forecloses on LLC real estate. The auction of the house produces excess proceeds deposited with state treasury. As member of record, Ex-wife has actionable claim to share of excess proceeds. How does husband’s estate prove that ex-wife has no right to house proceeds?
4.“When is the right time to do estate planning?”
a. Now. A proper estate plan saves time,money, and stress for loved ones. Have you ever been in a line behind someone who cannot make a decision?Was it frustrating? The Constitution gives all citizens fundamental rights over property, over minor children, over our bodies, and more. Failure to make certain decisions in advance rarely reaches a desirable result.
5.“What happens if I do nothing?”
a.Life goes on. A default law,or someone else,makes the decision you could have made. Neither the cost of that process nor the result can be determined in advance because personal circumstances change over time. The need for a decision or decision-maker can lie dormant for years. Usually when someone else wants to have documented proper ownership of the property.Estate planning provides control, the type of plan determines how much control.
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*Watch for big “life”events. Birth, marriage, death, divorce&disability, trigger these kinds of questions.
*The information provided in this article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, does not create an attorney-client relationship, and you should not act upon it without seeking independent legal counsel.