Estate Planning

Why Estate Planning?

Life is a delicate thing that can be gone in a moment’s notice; without a plan in place, your loved ones will be impacted greatly. An estate plan is critical in making sure that you have a say in what happens to your assets when you pass away, or become unable to make decisions for yourself. It is a misconception that estate planning is only for the wealthy. Everyone has an estate, no matter how large or small it may be. Capital City Law is dedicated to helping you create a plan for your estate, and making sure you and your loved ones are taken care of after you pass away.

It protects you and your loved ones

Preparing for the unexpected is the best kind of security you can give yourself and your loved ones. With an estate plan in place, you are making sure your children receive the best care possible according to your specifications if you are unable to care for them yourself. If you do not put together a plan, you are leaving your children and loved ones in the hands of a court judge that will not know your situation, and may not choose the best option for your family.

Prevents potential conflict between potential beneficiaries

Make sure that when you pass away, there is no potential for your family members to wage war on one another. If you have an estate plan set, it doesn’t matter who thinks they deserve what. Because your wishes are clearly written out, no one can argue about who gets what. Make sure you are able to calm any family strife, and take control of what’s yours by creating a specific plan of your wishes.

Puts your assets in the right hands

If you do not create a plan for your assets, you will have no control over what happens to them when you pass away. With no plan in place, the court will decide what happens to your estate, and your assets could end up in the wrong hands. With estate planning, you have the ability to designate heirs to your property. You have the power to designate who gets what, and make sure that your assets are rightfully distributed.

Your Last Will and Testament

What is a last will?

A last will is an estate planning document that dictates who will receive your property when you pass away. It also appoints an attorney to represent you and carry out your wishes as you state in your last will. In your will, you specify how you want your possessions distributed, and name beneficiaries to receive them. You are also able to appoint a legal guardian if you pass away before your children turn 18.

Your last will and testament is just one part of a comprehensive estate plan. If a person dies without a last will and testament, they are said to have died “intestate” and state laws will determine how and to whom the person’s assets will be distributed. Some things you should know about wills:

  • A will has no legal authority until after death. So, a will does not help manage a person’s affairs when they are incapacitated, whether by illness or injury.

  • A will does not help an estate avoid probate. A will is the legal document submitted to the probate court, so it is basically an “admission ticket” to probate.

  • A will is the only place to nominate the guardians (or back-up parents) of your minor children if they are orphaned. All parents of minor children should document their choice of guardians. If you leave this to chance, your children could end up with the wrong guardians.

Revocable Trusts

A trust is a legally binding relationship when a trustee holds property on behalf of someone else, a beneficiary. You do not have to be deceased to have a revocable trust, as it goes into effect as soon as it’s been established. They remain private and assure immediate action if specified. A trust only covers the property that is transferred to it, and in the name of the trustee.

Trusts have been a tool used for hundreds of years by the wealthy to avoid the lengthy probate process when someone dies. It is a misconception that a trust can only be used by the wealthy. Listed below are the reasons that trusts are beneficial for everyone:

  • If designed correctly, it can avoid probate.

  • It can protect assets for the beneficiaries against creditor claims.

  • It minimizes “death taxes”.

  • It provides for potential mental incapacity.

Revocable trusts cover three phases of the individual’s life:

1. When the trustmaker is alive.

This is when the trust is initially drafted, and includes specifications allowing the trustmaker to invest and spend the assets listed in the trust for their benefit during their lifetime. The trust can be undone, hence the name “revocable”, and can be adjusted and changed throughout the trustmaker’s life. This is an important consideration because trusts become active immediately, rather than as soon as the trustmaker passes away.

2. When/If the trustmaker becomes mentally incapacitated.

The trust should specify what happens if the trustmaker becomes mentally incapacitated. Trusts generally name successor trustees, who are designated to step in and take over managing the trust in the event of the trustmaker becoming mentally incapacitated.

3. After the trustmaker passes away.

Because they can no longer make changes to their trust, once the trustmaker passes away, their trust automatically becomes irrevocable. The named successor steps in and pays the trustmaker’s debts, and distributes the assets as outlined in the trust.