Imagine that tomorrow, you fall severely ill and become completely incapacitated. If you were in those circumstances, what would happen to your possessions, and who would make medical decisions for you? Who would handle your financial obligations, and who would be responsible for dividing your assets among your heirs if you should pass away?
These are the types of questions estate planning addresses. Estate planning is the process of documenting your wishes and desires concerning medical care and end-of-life issues. More expressly, an estate plan describes who gets what, who cares for your children, and who can make medical decisions for you if you become indisposed.
The point of this type of planning is to protect your estate and avoid a costly court-mediated probate process when you die. It also protects your heirs and loved ones from conflict and argument by providing a clear description of how to divide your property and possessions among them. An estate planning attorney can provide general guidance and specific strategies when planning for your future.
Components of Estate Planning
Every person’s plan will differ, but most will contain the following components.
- A will is a written document describing who gets your assets and possessions when you pass away. Without a will, the court will decide how to split your assets.
- A trust is a legal entity that can hold your assets. They will be managed by a trustee on behalf of a beneficiary and distributed according to your directions.
- A power of attorney gives an individual of your choice the responsibility to make healthcare or financial decisions on your behalf.
- An advanced directive establishes your wishes concerning end-of-life care if you cannot communicate your desires.
Why Estate Planning Matters
Most people don’t want to think about the possibility of dying or falling severely ill. However, if you pass away without a tractable plan for your estate, the onus will fall on the court to appoint a representative to oversee things. This person may not be the person you would have chosen, and they may not make decisions that are consonant with your values, wishes, and desires.
Estate planning ensures that your wishes are honored and that disputes concerning asset division do not arise. Without a will, for example, your heirs can get into a protracted legal dispute in which they argue about dividing assets. Malicious parties can also use the confusion surrounding your death to take advantage of your loved ones.
By structuring your estate in specific ways, you can also reduce the amount of any estate taxes your estate will owe. For instance, transferring assets to an irrevocable trust can help reduce estate tax liability. These sorts of estate planning techniques ensure that the maximum possible amount of assets gets transferred to your beneficiaries.
Martin & Birdsong, Attorneys at Law: Estate Planning Attorneys Serving Columbia
Planning for the future is a good idea, whether you are just entering the workforce or are entering your twilight years. Contact Martin & Birdsong, Attorneys at Law, online or call today at 573-348-4500 for a free case consultation with one of our estate planning attorneys serving Columbia.