How an Estate Planning Attorney Can Secure Your Future

Estate planning is a topic many people avoid, but it plays a critical role in protecting your assets and ensuring your family's future. An estate planning attorney can help you navigate the complexities of wills, trusts, and other important documents. But what exactly does an estate planning attorney do, and why is it so important to have one? Let’s dive in to answer these questions and more.

Key Takeaways

• An estate planning attorney helps you create strategies to manage and distribute your assets.

• They provide guidance on creating wills, trusts, and other legal documents.

• They ensure your estate planning aligns with current laws to avoid complications.

• Estate planning attorneys are crucial for minimizing estate taxes and protecting your beneficiaries.

Understanding Estate Planning

Estate planning involves preparing tasks that serve to manage an individual's asset base in the event of their incapacitation or death. This includes the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of experienced attorneys and financial advisors.

The Role of an Estate Planning Attorney

An estate planning attorney specializes in the laws and regulations related to wills, trusts, estates, and probate. Here are some of the key responsibilities they handle:

1. Creating Wills and Trusts

Creating a will is one of the most basic functions an estate planning attorney performs. They help draft legal documents that define how your assets will be distributed upon your death. Trusts can also be set up to manage your assets during your lifetime and after.

2. Minimizing Estate Taxes

One of the significant advantages of working with an estate planning attorney is minimizing estate taxes. They can create strategies to reduce the tax burden on your beneficiaries.

3. Avoiding Probate

Probate can be a lengthy and costly process. An estate planning attorney can help structure your estate to avoid probate, ensuring your assets are distributed more efficiently.

4. Setting Up Power of Attorney

A power of attorney allows someone to make decisions on your behalf if you become incapacitated. An estate planning attorney can help you designate a trusted individual for this role.

5. Healthcare Directives

An estate planning attorney can also assist in setting up healthcare directives, such as a living will or healthcare power of attorney, to ensure your medical wishes are followed.

Why You Need an Estate Planning Attorney

Legal Expertise

Estate laws can be complicated and vary by state. An estate planning attorney has the expertise to ensure your estate plan complies with current laws and regulations.

Personalized Service

Every individual’s situation is unique. An estate planning attorney can provide personalized advice and create a customized plan that best suits your needs and goals.

Peace of Mind

Knowing that your estate plan is legally sound can provide peace of mind for you and your loved ones. An attorney can help ensure that your wishes are carried out exactly as you intended.

Real-Life Examples

Example 1: Avoiding Family Disputes

Consider the case of the Johnson family. After Mr. Johnson passed away, his children disputed over the distribution of his assets. This led to lengthy court battles and strained relationships. If Mr. Johnson had worked with an estate planning attorney to create a clear and legally binding will, these disputes could have been avoided.

Example 2: Protecting a Special Needs Child

Mrs. Smith has a special needs child who requires ongoing care. By working with an estate planning attorney, she was able to set up a special needs trust. This ensures that her child will receive the necessary care without jeopardizing their eligibility for government benefits.

Steps to Finding the Right Estate Planning Attorney

Finding the right estate planning attorney is crucial. Here are some steps to help you get started:

1. Ask for Referrals

Start by asking friends, family, or financial advisors for referrals.

2. Check Credentials

Verify that the attorney is licensed and has experience in estate planning.

3. Conduct Interviews

Meet with several attorneys to discuss your needs and see if you feel comfortable with them.

4. Ask About Fees

Understand how the attorney charges for their services and ensure it fits within your budget.

What to Expect in Your First Meeting

During your first meeting with an estate planning attorney, you can expect to discuss your financial situation, family dynamics, and your goals for your estate plan. Be prepared to provide information about your assets, liabilities, and any existing estate planning documents.

Common Documents Prepared by Estate Planning Attorneys

Will : Specifies how assets are distributed after death

Trust : Manages assets during life and after death

Power of Attorney : Designates someone to make decisions if incapacitated

Healthcare Directive : Specifies medical wishes if unable to communicate

Living Will : Provides instructions for end-of-life medical care

Table 2: Benefits of Estate Planning

Avoiding Probate Streamlines : asset distribution

Reducing Estate Taxes : Minimizes tax burden on beneficiaries

Protecting Beneficiaries : Ensures assets are managed according to your wishes

Planning for Incapacity : Designates decision-makers for medical and financial matters

Providing Peace of Mind : Offers assurance that your wishes will be honored

List: Essential Tips for Estate Planning

1. Start Early: The earlier you start planning, the better.

2. Review Regularly: Update your estate plan as life circumstances change.

3. Communicate Your Wishes: Clearly communicate your plans to your beneficiaries.

4. Choose the Right Executor: Select a trustworthy and capable executor for your will.

5. Consider a Professional: Work with an estate planning attorney to ensure everything is legally sound.

Common Mistakes to Avoid

Even with careful planning, mistakes can happen. Here are some common pitfalls to avoid:

1. Not Updating Your Plan

Life changes, such as marriage, divorce, or the birth of a child, may require updates to your estate plan.

2. Failing to Plan for Incapacity

Many people focus solely on what happens after they die, but planning for incapacity is equally important.

3. Overlooking Digital Assets

In today’s digital age, it’s essential to include instructions for managing digital assets, such as online accounts and digital currencies.

The Cost of Hiring an Estate Planning Attorney

The cost of hiring an estate planning attorney can vary widely based on the complexity of your estate and the attorney’s experience. Some attorneys charge a flat fee, while others bill by the hour. It’s essential to discuss fees upfront and understand what services are included.

The Importance of Regular Reviews

Estate planning is not a one-time task. It requires regular reviews and updates to ensure it still aligns with your wishes and current laws. Schedule periodic reviews with your estate planning attorney to keep your plan up to date.

Conclusion

An estate planning attorney is invaluable in creating a comprehensive and legally sound estate plan. They can help you navigate the complexities of wills, trusts, and other essential documents to ensure your assets are protected and your wishes are honored. By taking the time to invest in estate planning, you can provide peace of mind for yourself and your loved ones, knowing that your affairs are in order.

90210 Star Luke Perry’s Death Demonstrates the Importance of Planning for Incapacity

In late February, Luke Perry, who became famous starring in the 1990s TV series Beverly Hills 90210, suffered a massive stroke at age 52. He was hospitalized under heavy sedation, and five days later, when it became clear he wouldn’t recover, his family decided to remove life support.

Perry died on March 4th, 2019 surrounded by his two children—21-year-old Jack and 18-year-old Sophie—along with his fiancé, ex-wife, mother, siblings, and others.

Whether or not you were a Luke Perry fan, it’s hard not to be somewhat shocked when someone so young, successful, and seemingly healthy passes away so suddenly. In these moments, the fragile impermanence of life becomes glaringly obvious. It’s life’s way of reminding us that incapacity and death can strike at any time, no matter who you are.

Such reminders can make you feel extremely vulnerable. And they can also be a precious reminder to make the most of life now.

Reminders of the fleeting nature of life can actually be a wonderful thing, if it motivates you to savor life now AND take the proper action to protect the ones you love through proper estate planning. And while we don’t yet know exactly what levels of planning Perry had in place, it appears he was thoughtful and responsible enough to have at least covered the basics.

Planning for incapacity and death

Perry was reportedly inspired to create his own estate plan following a fairly recent health scare. In 2015, after discovering he had precancerous growths during a colonoscopy, Perry created a will, leaving everything to his two children. Since Perry was worth an estimated $10 million, divorced with kids from the first marriage, and about to be married again, creating a will was the very least he could do.

But wills are just a small part of the planning equation. Wills only apply to the distribution of your assets following death, and even then, your will must go through the court process known as probate for your assets to be distributed. Because a will only comes into play upon your death, if you’re ever incapacitated by accident or illness as Perry was, it offers neither you nor your family any protections.

In Perry’s case, he was incapacitated by a stroke and on life support for nearly a week before he died. During this period, the fact Perry had a will was irrelevant because he was still alive. But given how events unfolded, it appears Perry had other planning vehicles in place to prepare for just this situation.

The power over life and death

During the time he was incapacitated, someone was called upon to make crucial medical decisions for Perry’s welfare, while his family was summoned to his side. To this end, it’s likely that Perry designated someone to serve as his medical decision-maker by granting them medical power of attorney - in Minnesota known as a health care directive. He may have also created a living will, which would provide specific instructions to this individual regarding how to make these medical decisions.

Granting medical power of attorney gives the person you name the authority to make healthcare decisions on your behalf in the event of your incapacity. The document that does this is known as an advance healthcare directive, and it’s an absolute must-have for every adult over age 18.

Perry was put on life support for nearly a week, and then he was removed from it and allowed to die without ever regaining consciousness—and without any apparent conflict between his loved ones. This indicates that someone in his family likely had the legal authority to make those heart-wrenching decisions over Perry’s life and death.

Without medical power of attorney, if any of Perry's family were in disagreement over how his medical care should be handled, the family may have needed a court order to terminate life support. This could have needlessly prolonged the family’s suffering and made his death even more public, costly, and traumatic for those he left behind. 

The power over your money

Along with medical power of attorney, every adult should also have financial durable power of attorney. In the event of your incapacity, financial durable power of attorney is an estate planning tool that gives the person you choose immediate authority to manage your finances, such as paying your bills, collecting government benefits, and overseeing your bank accounts.

We can’t be sure at this point whether or not Perry put in place durable power of attorney, but since this planning document goes hand-in hand with medical power of attorney, it’s almost certain he did. Yet seeing that Perry was only incapacitated for five days before his death, durable power of attorney may not seem totally necessary in his case.

But what if Perry’s incapacity had lasted a lot longer?

Given that Perry could have lingered on life support for months or years, it’s crucial that someone he trusted had the authority to manage his finances during his incapacity. Without durable power of attorney, the court will choose someone to manage your finances, and that someone might be a person you wouldn’t want anywhere near your life savings or checkbook.

What’s more, that someone could even be a “professional” who gets paid hefty hourly fees to handle things, even if you have family members who want to serve.

Learn from Perry’s example

While Perry’s death is certainly sad, if it inspires you to put the proper estate planning in place, it can ultimately prove immensely beneficial. Whether you already have a basic plan in place or nothing at all, meet with me to get educated about the specifics necessary to keep your family out of court and out conflict if and when something happens to you.

I’ll help ensure that in the event of your incapacity, or when you die, your loved ones will have the same protections Perry’s had—and more. Contact us today to attend one of our live educational events or get started with a private Family Wealth Planning Session.

UPDATE: Hacked laptop reveals cryptocurrency was already gone . . .

In a previous post I discussed the importance of accounting for digital assets in the context of the mysterious death of a Canadian cryptocurrency entrepreneur who had suddenly died while visiting India only weeks after implementing an estate plan but failing to account for nearly $150 million in cryptocurrency assets. You can read that here. His company claimed that the assets were frozen on a laptop and that he was the only one who knew the password.

Well, security experts were finally able to hack into his laptop to retrieve the funds. However, what they found was that digital assets had been siphoned out of the laptop nearly 6 months prior to his supposed death. I would say this is even more evidence that Mr. Cotten is still alive somewhere. More on the story here!

Estate Planning Best Practices Gleaned From Famous Celebrity Deaths

Discussing death can be awkward, and many people would prefer to just ignore estate planning all together. However, ignoring—or even putting off—such planning can be a huge mistake, as these celebrity stories will highlight.

The next time one of your relatives tells you they don’t want to talk about estate planning, share these famous celebrities’ stories to get the conversation started. Such cautionary tales offer first-hand evidence of just how critical it is to engage in estate planning, even if it’s uncomfortable.

The Marley Family Battle
You would think that with millions of dollars in assets—including royalties offering revenue for the indefinite future—at stake, more famous musicians would at least have a will in place. But sadly, you’d be wrong. Legendary stars like Bob Marley, Prince, and Jimi Hendrix failed to write down their wishes on paper at all.

Not having an estate plan can be a nightmare for your surviving family. Indeed, Marley’s heirs are still battling one another in court three decades later. If you do nothing else before you die, at least be courteous enough to your loved one’s to document your wishes and keep them out of court and out of conflict.

 
Paul Walker Died Fast and Furious at Just 40
While Fast and Furious actor Paul Walker was just 40 when he died in a tragic car accident, he had enough forethought to implement some basic estate planning. His will left his $25 million estate to his teenage daughter in a trust and appointed his mother as her legal guardian until 18.

But isn’t 18 far too young for a child to receive an inheritance of any size? Walker would have been far better advised to leave his assets in an ongoing trust, with financial education built in to give his daughter her best shot at a life well lived, even without him in the picture.

Most inheritors, like lottery winners, are not properly educated about what to do after receiving an inheritance, so they often lose their inheritance within just a few years, even when it’s millions.

Indeed, none of us has any clue when we’ll die, only that it will happen, so no matter how young you are or how much money you have—and especially if you have any children—don’t put off estate planning for another day. You truly never know when it’ll be needed.

Heath Ledger Didn’t Update His Estate Planning
Even though actor Heath Ledger created a will shortly after becoming famous, he failed to update it for more than five years. The will left his entire fortune to his parents and sister, so when he died unexpectedly in 2008, his young daughter received nothing, as she hadn’t been added to the will. Fortunately, his parents made sure their granddaughter was provided for, but that might not always be the case.

Creating an estate planning strategy is just the start—be sure to regularly update your documents, especially following births, deaths, divorces, new marriages, acquiring new assets, or retiring. Many estate plans fail because most lawyers don’t have built-in systems for updating your estate plans, but we do—mostly because we don’t want this to happen to your family.

Paul Newman Cut Out His Daughters Too
Though it’s a good idea to regularly update your estate plan, be sure your heirs know exactly what your intentions are when making such updates, or your family might experience significant  shock by not knowing why you did what you did.

The final update to Paul Newman’s will, which was made just a few months before his death in 2008, left his daughters with no ownership or control of Newman’s Own Foundation, his legendary charity associated with the Newman’s Own food brand. Prior versions of Newman’s will— and indeed his own personal assurances to his family—indicated they’d have membership on the foundation’s board following his death.

Instead, the final version of his will left control of the foundation to his business partner Robert Forrester. Some allege that during his final months, when Newman was mentally unstable, he was secretly persuaded to change his estate plan to leave control of the Newman’s Own brand and foundation to Forrester. Newman’s daughters are currently fighting Forrester in court over the rights they believe they’re entitled to receive.

While changes to your estate plan may seem perfectly clear to you, make sure your family is on the same page by clearly communicating your intentions. In fact, if you are making significant changes to your plan, and your children are adults, we often recommend a full family meeting to go over everything with all impacted parties, and we often facilitate such meetings for our clients.

Muhammad Ali Made His Wishes Clear
Boxing great Muhammad Ali wanted multi-day festivities to be held in his honor, including a large festival, an Islamic funeral, and a dazzling public memorial at the KFC headquarters in Louisville, KY. Given such elaborate plans, he worked with his lawyers for years, ensuring his wishes would be properly carried out.

While you probably won’t need a multi-day public memorial at a fast food restaurant, you may have wishes regarding how your life should be memorialized when you pass or how your care should be handled if you’re incapacitated. If you eat a special diet or want certain friends by your side while incapacitated, you have to make these wishes clearly known in writing or they very well might not happen. At the same time, you should spell out exactly how you want your remains cared for and what kind of memorial service, if any, you prefer.

If you have any questions at all about this topic, do not hesitate to give me a call or send me a message.