Hi there, my name is Andrew Cobin, I'm a board-certified specialist in estate planning and probate law, and I want to talk today about estate planning 101.
Why do I want to talk about this?
Well, it seems that about once a month I get a call and it goes along these lines "uh I'm not really interested in estate planning but I do need help with a will", Wow...
Where to begin with that?
Well, estate planning is more than just a will although certainly a will can be part of that, estate planning is going to take into consideration three different phases in your life.
-Phase one: While you're alive and well, there's nothing I want to do with this estate planning business that's going to impact the way I control my assets and property today. Now that's not always the case, certain individuals that may be very wealthy and they've got tax considerations, and that in those circumstances, we may intentionally do something with an individual's ability to control their assets for the purposes of reducing their estate tax liability. Other situations may include someone who is looking to do some planning for long-term care, so we may do something with the assets to arrange them in such a way to make qualifying for a a public benefits program such as Medicaid a little bit easier to do. So, estate planning that that first phase we need to consider is while you're alive and well.
-Second phase: We need to consider is if you become incapacitated: So I'm not talking about a physical disability here, well that certainly could be the case. I mean that if you can no longer manage your affairs, we need to have a plan in place that takes care of you and your loved ones the way you would have done it if you could have continued to do so yourself. Now that's probably going to involve powers of attorney and that may involve a trust, and in subsequent videos we'll talk about what those powers of attorneys are, what they do, what the difference is with the trust, how the trust may come into play in a situation of you being incapacitated. So we have alive and well, we have incapacitation and the last phase we need to think about is...
-Third phase: Planning for your death. We want a plan that transfers what you have to whom you want in the way that you want, and that the way that you want, generally speaking, is a way that is tax efficient, time efficient and transfers to the heirs in such a manner that they get to take advantages of that inheritance.
So, as you can see, there's a little bit more to that than just simply a will. I like to think of estate planning in those terms, while you're alive and well, making sure you control your assets, having a plan for you and your loved ones if you become disabled, and that that tax and a time efficient transfer of your wealth to your heirs in a way that they can take advantage of it. It's not just for the rich, I think that's the important thing. In fact, most of my clients or the vast majority of my clients don't have estate tax issues, but they do have other issues. They're concerned about making sure that things go an efficient way and you can only do that through estate planning.
I like to think that everyone has an estate plan, whether you like it or not, so you can either do the planning, you can sit down, put the work in and and produce a plan that's going to be reflective of your goals or you can leave it to the defaults, and the default generally means that we're going to navigate through the court system and we're going to rely on the rules that the state provides about what happens to your assets and what happens to you if you're incapacitated. So that's not ideal and I think that's pretty easy to see.
So that's estate planning 101, I'm going to leave it there for today thanks for tuning in and we'll talk to you again next time.
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