What You Need To Understand About Estate Planning

Estate planning may sound like the domain of the very wealthy; however, in the eyes of the law, an estate is simply the aggregate of property an individual owns, and most everyone owns something. Property ownership includes individual as well as jointly owned bank accounts, stocks and bonds, retirement accounts, real estate, jewelry, vehicles, your online digital footprint, and even pets. Short of being utterly destitute, you have an estate, and planning for it helps to protect yourself, your family, and your loved ones.

According to Caring.com, fewer Americans than ever are engaging in estate planning. The number of adults who have a will or other types of estate planning documents has fallen nearly 25 percent since 2017. Astonishingly, the demographic of older and middle-aged adults is less likely to have wills and estate plan documents at roughly the same 25 percent rate. Additionally, a growing number of Americans lack the resources and knowledge required to know how to get a will. The prevalence of estate planning documents overall since 2017 has shown a decrease of almost 25 percent.

In their annual survey, Caring.com posed the question to its participants as to why they have put off having estate planning documents, and more often, people cite a lack of education or the perceived cost of estate planning as the most significant reason. Yet 60 percent of the same respondents think planning their estate is either somewhat or very important. Data shows that as a person's income increases, their likelihood of having estate planning documents – such as a will, living trust, or powers of attorney – also increases; however, even those Americans with the resources to create a will feel it is something they can put off until later in life, which has disastrous consequences for their loved ones in the case of unexpected death.

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Estate planning is the process of outlining specific instructions as to how you want your money and other property dispersed upon your death. It also includes decisions about your financial and medical care while you are living and final arrangements upon your death.

A will instructs how to divide up assets, debt, personal property, and more. A will can cover all of your estate planning needs; however, it does come with a few limitations. First, a court process, called probate, must be started upon death. During this sometimes lengthy process, a judge oversees the transfer of ownership of your property according to your will. Once a probate is opened, the will becomes public knowledge, as well as the property that the deceased owns. For those who wish to avoid court, or who wish to keep their affairs private, a revocable living trust may be the best option.

A living trust takes effect at the moment it is enacted while your will only become effective upon your death. Planning with a living trust can be more expensive, but it provides the advantage of avoiding probate court and keeps all of your information (and your beneficiaries’ information) private. Further, a living trust can provide for management of your assets should you become disabled.

A power of attorney is designed to take effect during your lifetime. There are two types of powers of attorney – financial and health care. The financial power of attorney covers who will make financial decisions for you if you are unable or unwilling to. You can specify more than one agent, and you can be very specific about what that agent can do on your behalf, including management of online accounts. The health care power of attorney also allows you to appoint one or more agents to act on your behalf; however, it is specific to your medical care decisions. It is important to ensure that your wishes are fully expressed to your agent(s).

If you are ready to discuss your planning needs, we would be honored to help. If you have an existing plan, we would be happy to review that plan to make sure it still works for you given your current health and financial circumstances. We look forward to hearing from you!

Elder Law of Omaha provides a range of services to our clients including estate planning, asset preservation trusts, long-term care Medicaid planning, and more. If you would like to discuss how to plan for your future, call our firm today at (402) 614-6400 to schedule your free initial attorney consultation.

Visit our website at www.ElderLawOmaha.com.