Gaining Clarity

What is Estate Planning? Estate planning might sound like something only the wealthy need to worry about, but the truth is, everyone has an estate. Your estate is simply everything you own—your car, home, financial accounts, investments, and personal belongings. Estate planning is the process of deciding who will inherit your possessions and how they will be managed after you pass away or if you become incapacitated. "Estate planning is just who gets what and how," says Jay Knighton, a board-certified attorney in estate planning and probate. This means it's not just about the money; it's about ensuring your wishes are honored and your loved ones are cared for according to your plans. Why Everyone Needs an Estate Plan Without an estate plan, the state will decide how to distribute your assets, which can lead to lengthy legal processes and potentially outcomes you wouldn't want. Here are the key components everyone should consider including in their estate plan: Who? Your estate plan will specify who gets your assets and who can make important healthcare and financial decisions if you’re unable to. For parents of minor children, it’s crucial to designate legal guardians for them. What? Clearly outline who receives what in your will or trust. Whether it's a piece of jewelry or a financial donation to a charity, specifying these details helps avoid confusion and disputes. How? Establishing trusts can be a good way to manage and protect your assets. For example, you can create a trust to ensure a minor child receives their inheritance at an appropriate age or to keep assets out of probate, simplifying access for your beneficiaries. What’s Included in a Basic Estate Plan? A basic estate plan typically includes the following documents: Wills and Trusts Wills: A will is a legal document that spells out who gets what. It also names an executor to carry out your wishes. However, wills must go through probate, a legal process that can be time-consuming. Trusts: Trusts can help avoid probate and manage assets more efficiently. A revocable living trust allows you to control the assets while you’re alive and outline how they should be handled after your death. An irrevocable trust, while more rigid, can offer tax benefits and asset protection. Medical Directives Medical Power of Attorney (POA): This document lets you designate someone to make medical decisions on your behalf if you’re unable to do so. Living Will: This specifies your wishes for end-of-life care, such as life support and resuscitation preferences. Financial Directives Durable Financial Power of Attorney: This allows someone you trust to handle your financial affairs if you’re incapacitated. What Happens if You Don’t Have an Estate Plan? If you don’t have an estate plan, your estate will go through probate regardless of its size, and the state will determine the distribution of your assets. This can be a lengthy and stressful process for your loved ones, and the outcomes might not align with your wishes. How Much Does Estate Planning Cost? Estate planning costs can vary. Hiring an attorney typically ranges from $1,500 to $2,000 for a basic plan. More complex estates may require additional planning and costs. Alternatively, there are online services that offer more affordable options, though these may not provide the personalized touch an attorney can offer. Schedule a Consultation At Warren & Fontana, we believe everyone should have an estate plan that reflects their wishes and protects their loved ones. Schedule a consultation with us today to start planning your estate and ensuring peace of mind for you and your family.

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