FAQS: Estate Planning and Asset Protection
Q: Why do I need a professional to help me with my will if I can create one online?
A: A custom will, drafted with an attorney, gives you significantly more controls than a one-size-fits-all document. For instance, you can add clauses to prevent assets from going to a beneficiary's creditors. You can require that a beneficiary has to go to college to receive a specified gift. You can make special provisions to help family members start a business or fulfill their dreams. Most importantly, you can ensure that your beneficiaries carry out your wishes just as you intended.
Q: Is a will enough?
A: A will is good for laying out how you want your assets distributed after you pass away, designating a guardian for your minor children, providing for special people in your life and naming an executor of your estate.
However, a will does not control the distribution of properties that pass outside your probate estate (like certain joint property, life insurance, retirement plans and employee death benefits) unless they are payable to your estate. In addition, your will becomes public upon your death and is available to anyone who wants to read it.
To make certain your affairs are wrapped up properly, privately and precisely as you wish, you need a comprehensive estate plan.
Q: I'm financially responsible for my elderly parents. Can an estate plan help me provide for their care while preserving their hard-earned assets?
A: Absolutely. A variety of tools exist to help you keep assets within the family while still meeting qualifications for certain types of government assistance, such as Medicaid or Supplemental Security Income. Some of these include long-term care insurance, Medicaid trusts, supplemental needs trusts, self-settled trusts and numerous asset transfer strategies.
Q: If I am not married, does the law automatically give my parents power of attorney to make decisions on my behalf if I become incapacitated?
A: No. We strongly recommend having an estate plan that appoints someone to handle this responsibility. If you do not, your parents or other relatives will have to petition a court for permission to make healthcare decisions on your behalf and to access your financial accounts to pay for your care, rent, mortgage and other matters.
With a plan in place, you eliminate this stress and let your loved ones concentrate on you.
Q: What does an executor do?
A: The legal duties of an executor, also known as a personal representative, vary from state to state. In general, your personal representative will help put your will into action, notify beneficiaries and creditors, make final payments, manage assets during the probate process, help distribute assets and close out accounts.
You should choose one person or possibly co-representatives capable of handling these myriad responsibilities and/or hiring professionals to help.
Have questions of your own? Contact The McLawhorn Firm today for a consultation.
FAQS: Athletes and Entertainers
FAQS: High Net Worth Individuals and Business Owners
FAQs: Heads of Households
FAQS: Nonprofit Organizations
IRS CIRCULAR 230 DISCLOSURE: Unless expressly stated otherwise, any U.S. federal tax advice contained in this website is not intended or written by THE MCLAWHORN FIRM to be used, and any such tax advice cannot be used, for the purpose of avoiding penalties that may be imposed by the Internal Revenue Service.
