Estate Planning

All legal documents are prepared by Hewitt & Waicker, LLC.

What is Estate Planning?

Estate Planning is planning for the future, both financial and medically. While everyone’s circumstances are different, the three basic documents everyone should have is a Last Will and Testament, Durable Power of Attorney, and Advance Directive for Health Care. Depending on an individual’s situation, estate planning may include additional documents and planning such as a Revocable Trust, Testamentary Trust, Irrevocable Life Insurance Trust (“ILIT”), Life Estate Deed, re-titling of assets, and/or gifting of assets during a person's lifetime directly to the desired beneficiaries. Estate planning may also result in the reduction of state and federal estate taxes, probate fees and overall asset protection.

• Last Will and Testament

  A Last Will and Testament allows you to leave your assets to the individuals of your choosing. Additionally, a Will afford you the opportunity to choose someone you believe will take care of your affairs and distribute your property in accordance with your wishes after you die. If you die without a Will, you will die "intestate” resulting in the laws of the State in where you reside determining who will receive your property.
  
  If you have need to provide for a minor child, dependent spouse, an elderly parent or a disabled child, a Will with testamentary trust and guardian provisions may be necessary, so that you can appoint a guardian, if one is needed for the children or disabled person, and appoint trustees you feel comfortable with to manage your assets after your death.

• Durable Power of Attorney

  A Durable Power of Attorney allows a designated individual known as an “attorney-in-fact” to manage financial affairs on your behalf if you are unable to do so. Your attorney-in-fact may be given broad powers to do everything or limited powers to perform specific acts. This document provides for the proper management of your financial affairs in the event of incapacity or incompetence.

• Advance Directive for Health Care

  An Advance Directive for Health Care (also known as a Health Care Power of Attorney and/or Living Will) allows a designated individual know as a “heath care agent” to make health care decisions for you, such as the selection of hospitals, doctors or type of medical treatment, if you are unable to make those decisions for yourself. Additionally, this document allows you to set forth your “end stage” wishes regarding medical treatment such as feeding tubes, resuscitation, respirators, medication, surgeries, etc.
  
  The Health Insurance Portability and Accountability Act (“HIPAA”) imposes strict guidelines regarding the release of private information to unauthorized individuals. It is crucial to have a well drafted Advance Directive that sets forth HIPAA release language allowing your Health Care Agent access medical information.

• Trusts

  There are many types of trusts used in the estate planning process, some of the most common include Revocable Trusts, Special Needs Trusts (“SNT”), Irrevocable Life Insurance Trusts (“ILIT”), and Marital Trusts/Credit Shelter Trusts. Trusts may be testamentary, meaning the trust provisions are built into a Will and only come into existence upon the death of the creator of such Will. Other trusts are separate “living” trusts that are created while an individual is alive and may be revocable or irrevocable by the trust creator. Often a combination of estate planning techniques is used along with a trust to gain the maximum benefit.

• Life Estate Deeds

  A life estate is created when an owner (“Granter”) of real property conveys the property to another (“Remainderman”) while reserving certain rights to the property, typically for the remainder of his or her life (“Life Tenant”). The Grantor may reserve only the right to live in the property for his or her life and have no other powers (“Life Estate without Powers”), or the Grantor may retain control and have the right to sell, lien or otherwise deal or dispose of the property, including undoing the deed that created the life estate interest (“Life Estate with Powers”). Life estate deeds can be effective to avoid probate, the claims of creditors, capital gains and generally to preserve the property for one’s family.

It is very common for an individual to have estate planning documents that a family thinks is fine until they have to use it. Quite often documents were drafted many years ago or by the individual themselves using a generic “form” document, and as a result the documents are out of date or not drafted under the property state law, or the individual’s wishes have changes but are not reflected in the documents. In the middle of a family health crisis situation is not the ideal time to discover that the documents are inadequate. Please contact the law firm of Hewitt & Waicker, LLC for a complimentary review of your documents and to discuss your estate planning options.

What is Probate?

Probate is the formal legal process of administering your estate after your death. Everyone has an "estate" no matter how small. If you die with a Will you will have a “testate” estate. If you die without a Will, you will have an “intestate” estate. The probate process typically takes anywhere from six months to several years, depending on the issues involved. Costs may include inheritance taxes, appraisal and advertising expenses, probate fees, personal representative commissions, attorneys' fees and court costs.

Although in some cases probate is a preferable way to settle an estate, probate administration can be a lengthy process that can be overwhelming for grieving family members. Probate can tie up assets that may be needed by family members and assets subject to probate are subject to claims of creditors. Proper planning and titling of assets through methods such as joint accounts, pay on death designations and life estate deeds may allow your assets to pass to your heirs automatically upon your death without becoming part of your probate estate.

What is a Guardianship?

What if there is no Power of Attorney or Advance Directive for Health Care, or you have the documents but they are very poorly drafted? What if you need to have your financial affairs and/or health care decisions managed by someone else? Someone would need to seek the appointment of a guardian of either your person (for health care) and/or property (for financial) through the court. This procedure requires a court hearing, is expensive and emotionally draining on your family, and it can take up to 9 months have a guardian appointed. Guardians must file a report with the court annually and for certain decisions need to petition to court for approval.

Taxes

There are several types of federal and state taxes, including estate tax, capital gains tax, gift tax and inheritance tax, that impact one's estate, most of which can be avoided or reduced with proper planning. You do not necessarily have to have a large estate to be affected by taxes, or to benefit from basic tax planning.

Most people have worked hard to earn what they have, and wish to ensure that as much as possible is preserved for their loved ones. Because the tax laws have many technical requirements, attempts to protect one's estate or redistribute one's wealth without professional guidance could result in a lost opportunity to avoid a substantial tax impact.