The Importance of Estate Planning
Life is a whirlwind oftentimes, so we must slow down and reflect on our uncertain futures. For women, one such reflection we should partake in annually is ensuring we have an accurate and up-to-date estate plan that properly reflects our evolving values and goals.
Our priorities and beliefs naturally change as we age, reflecting our current life stage and past experiences. For example, the importance of ensuring our kids are cared for or that our healthcare wishes are respected if we cannot make them are frequent preferences.
One way to prepare for our futures is by crafting a living trust that evolves with us as we age and protects our wishes in the event of our passing.
While other options exist for estate planning, a living trust is a preferential way to manage your assets during and after your passing that is superior to a will.
The Process
Living trusts generally entail hiring a lawyer who works with you to understand your beliefs, goals, and priorities. While working with a professional is not mandatory, lawyers can guide and help answer questions that inevitably arise during the various phases of crafting a trust. Additionally, lawyers will generally help you prepare a medical directive and power of attorney during this process to ensure your medical preferences and life decisions are respected and carried out by someone you trust.
Once completed, your living trust and other documents become legal tools that give you control of your life even after your passing.
While starting the estate planning process can be daunting, it is easier than you think and something that we encourage all of our clients to partake in at Lundeen Abrams Advisors. If you are unsure where to start, we have several law firms we can recommend.
Common Terms You Should Know
Before embarking on your estate planning journey, we think it is helpful to understand many of the standard terms used by estate planners, which we will define below.
Living Trust - A legal agreement or charter that outlines how and when assets will be transferred from one party to another while keeping action private (to the extent state law allows) and generally bypasses the need for probate court intervention.
Executor: The person charged with executing the legal agreement in the trust documents and working with a probate court to uphold the transfer process outlined in it.
Trustee: The person who owns the trust assets or group of persons responsible for managing or dispersing them. Trustees can include yourself in a revocable living trust, a law firm, a financial advisor, or trusted family members and friends.
Beneficiary: A person who receives assets from the trust after the passing of the asset owner.
Medical Directive: A legal document governing your medical preferences and choices should you become incapacities or unable to make them yourself.
Power of Attorney: Is a legal agreement allowing another to make legally binding decisions on your behalf for a specified duration concerning your personal, financial, medical, and legal affairs.
Other Benefits and Starting Your Plan
Establishing a trust is essential for the estate planning process, and whether you go with a living trust or another trust variant, it can help you execute your philanthropic goals, carry out your gifts to beneficiaries, and provide peace of mind when the unexpected happens.
Further, trusts can provide numerous tax benefits depending upon the type of trust established, and help protect your assets from civil judgements that otherwise could impact your legacy.
If you have yet to start the estate planning process, we are here to help and can assist you in choosing the right professional partners to fulfill your wishes. So, please get in touch with us and schedule a time to talk with us today. We will look forward to speaking with you soon!