5 Frequently Asked Questions About Estate Planning
By Patricia Louise Nelson
As an estate planning attorney, I often hear similar questions again and again. This article is designed to ask and answer 5 of those questions.
1. What makes an Estate Plan? An estate plan is a series of documents designed to convey your wishes to provide for you during your lifetime, even if you are incapacitated, and to provide guidance about what life support you might like in different situations, and to provide how you would like to dispose of your body when you’re done with it. Ideally, it is complete and thorough.
It is likely made up of a revocable living trust, a will, a power of attorney, an Advance Directive, and a document by which you appoint someone to be in charge of disposing of your remains and providing that person with your wishes.
2. Do I need a will if I have a revocable living trust? Yes, nearly always. A revocable living trust controls what happens to your assets owned by the trust when you die. It is possible that some assets could be left outside the trust, either inadvertently or on purpose. Regardless, if those assets cannot be accessed by your person in charge or one or more beneficiaries, a probate will be needed to process those assets. To ensure that your revocable living trust has control over these probate assets, you will need a “pour-over will.” A pour-over will is one that has your trust as the only beneficiary. It is the last way to get assets into your revocable living trust. It requires probate, which is expensive. So, while I recommend that you have a pour-over will, our plan is that you will never use it.
3. What is the most important part of my estate plan? It depends. If you are alive but incapacitated, it is likely that the most important part of your estate plan is your power of attorney and your revocable living trust. If you have died, the most important document in your estate plan may be your will and/or your revocable living trust. If you are near death, it is likely that the most important document could be your Advance Directive. Generally speaking, the most important document overall in an estate plan is often the revocable living trust, because it controls your assets while you are alive and after you have died.
4. What is my estate? This is a common question. Many people think of an “estate” as the assets of a rich person. Actually, an estate is whatever you own. It could be a car and some tangible personal property. Or a car, some tangible personal property, and a bank account. Perhaps your estate also includes a house. Maybe a retirement account or two. And a life insurance policy. Basically, your estate is everything you own.
5. Why hire an attorney to work on an estate plan? You don’t have to. I do, however, recommend that you use an attorney. You know that feeling “I don’t even know what questions to ask.” An attorney can help you not only ask the right questions, but also answer them. You maybe be able to save hundreds of dollars drafting your own estate plan. In my experience, self-made estate plans often cost hundreds or even thousands of dollars more to implement when the time comes simply because you do not know what you do not know. You therefore cannot prevent confusion and arguments caused by your documents. Confusion and arguments are expensive.
