When you think of an “estate plan” you likely think first of executing a Last Will and Testament. For many, a Will is the foundation of their estate plan. For some, a Will may be their entire estate plan. A comprehensive estate plan, however, may include other components in addition to, or even in lieu of, a Last Will and Testament. The Bellevue estate planning attorneys at Legacy Estate Planning, LLC explain some of the more common estate planning components.
What Are Your Estate Planning Goals and Objectives?
You probably associate estate planning with the distribution of your assets after death. While that is is an important estate planning goal, it should not be your only estate planning goal. On the contrary, a well thought out estate plan should also help grow your assets while you are alive, protect you and your estate in the event of your incapacity or disability, and provide for your loved ones after you are gone. Those additional goals and objectives require you to include additional, but related, components into your estate plan.
Common Components
Whether you include any/all these components into your estate plan will depend on your unique estate planning needs and goals; however, the following are common estate planning components:
- Incapacity planning – incapacity is not something that only happens when you reach your retirement years. On the contrary, incapacity can strike at any time. Statistically speaking, you stand a one in five chance of becoming incapacitated during your working years. If that happens, who will handle your finances? Who will make personal and healthcare related decisions for you? Without an incapacity plan, the answers to these questions could be decided by a judge in a court of law.
- Probate avoidance – probate is the legal process that follows your death. Formal probate can take months, even years, to complete and can be very costly. Moreover, your beneficiaries will not have access to probate assets until the end of the process. Using a trust, instead of a Will, as your primary estate planning tool is one wat to avoid formal probate because assets held in a trust bypass the probate process.
- Retirement planning – if you fail to consider your retirement planning needs within your estate plan, you may have nothing left to pass down to loved ones when you are gone.
- Tax avoidance – federal gift and estate taxes can significantly diminish the value of the estate you leave behind if you did not plan for the impact those taxes will have on your estate well ahead of time.
- Medicaid planning – long-term care costs can quickly deplete your retirement nest egg if you failed to plan. Planning typically requires you to include Medicaid planning in your estate plan to ensure that you will qualify if you need to when the time comes.
- Pet planning – if you have a pet that you consider to be part of the family, a pet planning component in your estate plan will ensure that your beloved pet does not get overlooked if something happens to you.
- Business succession planning – if you own a small business that you wish to pass down to the next generation it is imperative that you start planning for the transfer of ownership long before you plan to do so to increase the odds that the business will make the transition successfully.
- Special needs planning – if you are the parent of a child with special needs, comprehensive estate planning is even more important because gifting assets directly to your child could jeopardize his/her eligibility for much needed state and federal assistance programs.
Contact Bellevue Estate Planning Attorneys
If you have additional questions or concerns regarding estate planning, or if you are ready to get started on your plan, contact the experienced Bellevue estate planning attorneys at Legacy Estate Planning, LLC by calling (425) 455-6788 to schedule an appointment.
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