What Documents Should I Consider when Creating an Estate Plan? [part I]
Nov. 18, 2014
Many people understand the critical importance of estate planning, but they do not know how to go about creating their estate plan. Successful estate planning includes both a planning phase and an implementation phase. When an estate plan is carefully constructed, it can provide a range of benefits that includes protection of your financial legacy, transfer of wealth to beneficiaries, mitigation of tax liabilities, end-of-life planning and a broad spectrum of other benefits.
Although an effective estate plan requires careful analysis of an individual’s assets, liabilities, net worth, family relationships and a range of other factors, there are certain documents that most people should consider making part of the estate planning process. Wichita estate planning attorney J. Joseph Weber has provided an overview of some of the fundamental features present in most estate plans in this two-part blog post.
Given the rapid advance of extraordinary life-sustaining measures, a Kansas living will provides a way for you to make your intentions known regarding end-of-life medical intervention. This document can be used to specify your preferences regarding such measures as resuscitation, ventilators, tubal feeding and similar life-prolonging measures. A statutory living will may be used, if you are terminally ill.
Durable Power of Attorney for Healthcare Decisions
This estate planning instrument can be used in combination with a living will, but you can utilize this document even without a living will. The purpose of a durable power of attorney for healthcare decisions is to appoint an individual that you trust to make medical decisions in your place if you become incapacitated. This alternate decision-maker is often referred to as your “agent” or “attorney-in-fact.” As opposed to specifying the extraordinary measures you wish to approve if you have a terminal medical condition, this document appoints someone to step into your shoes and make those decisions when you are not physically or mentally able to do so. A power of attorney can be used in a broader range of situations than a living will because it is not limited to end-of-life medical procedures. This power of attorney can be used to consent or withdraw consent to the full spectrum of medical tests, treatment, procedures and services regardless of whether you are terminally ill.
Kansas Will and/or Living Trust
While a will is an estate planning tool with which many people are familiar, a living trust can provide a better alternative depending on an individual’s circumstances. Both of these estate planning tools provide a method for transferring your assets to your beneficiaries. A living trust can permit you to avoid the probate process, which might avoid probate expenses and time delays.
Although your assets will transfer to your beneficiaries when you die under a trust without the need for probate proceedings, the benefits of a trust as opposed to a will are sometimes overstated. The selection of the appropriate device for your situation depends on an analysis of your specific circumstances, so you should speak to an experienced Kansas estate planning attorney if you have specific questions about your situation.
A trust might be the best option if you own real estate in several different states, for example, because a will requires opening probate in each of the states where you own real estate. By contrast, if you own only a home and a small bank account that you and your spouse want to pass to the surviving spouse, a will might be sufficient. In this latter scenario, you might even be able to transfer the assets through the form of title on the property and your beneficiary designation on the account.
In some cases, you will want both a will and a trust. If you have minor children, for example, you will typically need both of these estate planning tools. The will can be used to designate who you wish to take care of your minor children if both you and your spouse pass away. The will should be accompanied by a trust that provides for the financial support of your kids. Another example of where you need both involves taking advantage of the financial flexibility of a trust while using a residual will to specify the disposition of any property that is never placed in the trust.
We invite you to read Part II of this blog post to learn more about the necessary components of an estate plan. Because every situation is unique, we invite you to contact us if you have specific questions. We invite you to call us or submit an inquiry form through this website to schedule your initial consultation.