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What is valuable to you? We often think of value in monetary terms alone. But of equal significance are our beliefs, our family stories, the heirlooms that have emotional significance but minimal monetary value. These are truly our treasures. And they should not be overlooked when creating your estate plan. We at the Estate Planning Center approach your estate planning with all your assets in mind. We assist clients with a total wealth management plan for life, and a distribution of your estate to whom you want, when you want, in the way you want. This includes a plan for those non-monetary family treasures.
Your estate is comprised of all assets of any value that you own or have control of. This may include insurance policies, investments, retirement accounts, real estate, business interests, recreational vehicles or equipment, special collections such as paintings, guns, coins, jewelry, or antiques. Your legacy includes much more. We understand the importance of passing on to future generations your core values and lessons learned.
There are many legal strategies involved in estate planning, including wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents. New clients often say that they do not have an estate plan. Most people are surprised to learn that they actually do have a plan. In the absence of legal planning otherwise, their estate will be distributed after death according to Tennessee's laws of intestacy. Of course, this may not be the plan they would have chosen. A properly drafted estate plan will replace the terms of the State’s estate plan with your own.
Your last will and testament is just one part of a comprehensive estate plan. If a person dies without a Will they are said to have died "intestate" and state laws will determine how and to whom the person's assets will be distributed. Some things you should know about wills:
Trusts come in many "flavors," they can be simple or complex, and can serve a variety of legal, personal, investment or tax planning purposes. At the most basic level, a trust is a legal entity with at least three parties involved: the trust maker, the trustee (trust manager), and the trust beneficiary. Oftentimes, all three parties are represented by one person or a married couple. In the case of a revocable living trust, for example, a person may create a trust (the trust maker) and name themselves the current trustees (trust managers) who manage the trust assets for their own benefit (trust beneficiary).
Depending on the situation, there may be many advantages to establishing a trust, including avoiding probate court. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries (or heirs) immediately upon the death of the trust maker(s) with no probate required. Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary. Or they may be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust maker(s) and the named beneficiaries. If well drafted, another advantage of trusts is their continuing effectiveness even if the trust-maker dies or becomes incapacitated.
A power of attorney is a legal document giving another person (the attorney-in-fact) the legal right (powers) to do certain things for you. What those powers are depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker, and may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions). When the intent is to designate a back-up decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old or was created in a different state.
An advance directive is a document that specifies the type of medical and personal care you would want should you lose the ability to make and communicate your own decisions. Anyone over the age of 18 may execute an advance directive, and this document is legally binding in Tennessee. Your advance directive can specify who will make and communicate decisions for you, and it can set out the circumstances under which you would not like your life to be prolonged if, for example, you were in a coma with no reasonable chance of recovery.
A document that goes hand-in-hand with your advance directive is an authorization to your medical providers to allow specified individuals to access your medical information, called a HIPAA Release. Without this authorization, your doctor may refuse to communicate with your hand-picked decision maker.
If you are part of a faith based community, the belief that all we have comes from God and we are merely stewards during our lifetimes will likely be of great significance to you. The question then becomes how and to whom you transfer the legacy of both wealth and wisdom at the end of your life. We will create your documents to reflect your beliefs and ensure the good stewardship you desire.
We offer free estate planning workshops to share additional information on the importance of comprehensive estate planning. Join us at our next free Estate Planning Workshop.