An estate planning attorney turns your goals regarding where and how you want to leave your assets after death into state-specific legal documents. The attorney listens to their clients about their specific goals and creates an estate plan so that the clients will be able to pass their assets in an efficient manner. Common goals that clients will see estate planning attorneys about include planning for minor children, avoiding probate, and minimizing estate tax.
What Does an Estate Plan Include?
The Main Estate Planning Document: Will or Trust
The main estate planning document is either a will or a trust, depending on the type of estate plan the client wants. A trust-based plan is designed to avoid probate and requires more work to set up and maintain. Probate is when the court oversees the administration of an estate. A will or trust will control how many assets are distributed. An important part of a will and trust is the nomination of who the client wants to administer their estate. This individual is the trustee for a trust-based plan or personal representative (aka executor) for a will-based plan.
Documents to Plan for Incapacity: Powers of Attorney
Another important part of an estate plan includes planning for incapacity. This is important while the client is still living, but does not have the mental capacity to deal with their financial affairs or to make medical decisions. An estate planning attorney will help the client pick an agent to make decisions on the client’s behalf and draft the document to define the scope of the agent’s power.
End-of-Life Decisions: Healthcare Directive
Another document that is prepared as a part of the typical estate plan is the healthcare directive. This is the document that allows you to choose whether you would want to be kept alive artificially if you were in a terminal condition. This document is not the same as a POLST (Physician Orders for Life-Sustaining Treatment). A POLST is filled out with the assistance of a doctor and directs how emergency personnel should respond when called to the site of an injury or illness.
Estate Planning Attorney vs. Estate/Probate/Trust Administration Attorney: What’s the Difference?
The difference between an estate planning attorney and an attorney who does administrations of estates and trusts is that an estate planning attorney drafts the estate plan (pre-death), and an estate/trust administration attorney carries out the estate plan (post-death). It is very common for estate planning attorneys to also practice on the estate/trust administration side and vice versa. Sometimes, estate planning attorneys will administer the estate plans they personally prepared after their client has died if the personal representative/trustee chooses to work with the estate planning attorney to represent them in the administration process. Conversely, an estate/trust administration attorney can represent the personal representative/trustee to administer an estate plan that was drafted by a different attorney.
What Happens If I Die Without an Estate Plan?
The estate of a person who dies without a will (or trust in place) is called an intestate estate. If an individual dies intestate, the disposition of assets not otherwise disposed of by a beneficiary designation or payable on death arrangement is controlled by the state’s default rules called the laws of intestacy. Essentially, the laws of intestacy is the state’s estate plan for someone who dies without a plan. This default estate plan may give assets to a completely different set of individuals than the decedent would have wanted if they had an estate plan. The state tries to guess who likely a decedent would want to inherit their assets, but each individual and their family is unique. Blended families are especially affected by intestate estate administrations because step-children are not in line to inherit assets and therefore could unintentionally be left out.
What Problems Can Come from Dying Without An Estate Plan?
With an intestate estate, the decedent is not able to nominate a personal representative to administer their estate. There are other problematic issues that come with an intestate estate, such as the personal representative being required to post a costly bond. Oftentimes, the cost of the bond is more than the cost of an estate plan that waives the bond requirement. One problematic scenario is that a person dies intestate, and a minor is entitled to inherit assets. If the assets are over a certain amount, a guardianship proceeding must be started so a guardian can hold money on behalf of the minor child. A guardianship proceeding will likely cost several thousand dollars in attorney’s fees. An estate plan incorporating planning for minor beneficiaries avoids the need for a guardianship for the minor beneficiary.
How Much Does an Estate Plan Cost?
The short answer is—it depends. The more time an estate planning attorney spends dealing with complex issues, drafting your plan, and setting up assets to be distributed in a special way, the higher the cost of the estate plan.
What Factors Determine the Cost of An Estate Plan?
Complexity and therefore expense to a plan can be added in various ways. A plan where a client wants to leave their assets in equal shares to responsible adult children will be less complex than a client who has young children (or an irresponsible adult child) and therefore needs to plan for a person to hold money on the beneficiary’s behalf in a trust or custodianship. Complexity can also be added when a client’s estate is large enough to be subject to estate tax and the client wishes to incorporate estate tax planning in order to minimize such tax.
The types of assets a client owns may also add complexity to their estate plan because special provisions may need to be made to plan for such items. Owning a business, for example, can add additional planning. Also, the income tax consequences of your assets can add complexity. IRAs are subject to an array of rules regarding their taxability depending on who inherits the account. Non-retirement investment accounts are not subject to the same income tax rules. Therefore, planning an estate with a special plan for a large IRA may be more complex than planning for a different client with the same amount of assets but invested in a different way.
Does a Trust-Based Plan Cost More Than a Will-Based Plan?
The answer is yes. A trust-based plan invariably costs more than a will-based plan. The cost is roughly double for a trust-based plan because of the additional work that it takes to draft the documents and transfer assets to the trust. A trust-based plan is designed for a more streamlined administration after death (to avoid probate), but it is more work to set up and maintain during the client’s life.
How Much Does It Cost to Update an Existing Estate Plan?
It can be less expensive to update an existing estate plan than to start one from scratch. If the client has a recently prepared plan and wants a simple change, such as switching out the personal representative, it can be relatively inexpensive. These types of changes can be handled by an amendment to a plan rather than a complete redo. Major changes to provisions relating to the distribution of assets, such as a new will or restated trust, may require more work. If the estate planning attorney did not prepare the estate plan that a client wishes to change, the attorney would likely do a thorough review of the plan before making changes to it.
Get in Touch with Our Trusted Estate Planning Attorneys in Vancouver, Washington!
An estate planning attorney works with their clients to turn their estate planning goals into an efficient state-specific plan. An estate plan consists of the main document, which is either a will or a trust, as well as documents to plan for incapacity, such as financial and medical powers of attorney. Having an estate plan will not only give an individual the ease of mind knowing their assets will be distributed to the correct people in the correct manner, but will save their family from having to deal with the problems caused when an individual dies without any plan in place. If you have questions about how to get started with your estate plan, feel free to contact Navigate Law Group.
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Every legal issue is very unique. Accordingly, the information in this blog is intended as general education material and not as legal advice. If you think you may have a legal issue, you should consult an attorney.