To get straight to the point, having an estate plan is one of the most important things you can do for your peace of mind and the benefit of your loved ones. Unfortunately, it is also one of the things that far too many of us dread and put off dealing with until much later in life. But at Hammerle Finley, we firmly believe that it is never too early to begin planning for the future.
Millions of lives disrupted
The COVID-19 pandemic has disrupted normal life around the world, adding a new element of urgency to estate planning. As with every crisis, there are those who learn from it and adjust their lives accordingly. But there are also others who may overlook the severity of making adequate preparations for the future. All things considered, this is a time to consider making serious changes, especially in the area of estate planning.
Whether you began a plan but never finished it or are in need of making modifications to your original plan, the experienced estate planning attorneys at Hammerle Finley are ready to assist you and provide expert legal guidance through the entire estate planning process.
Why is estate planning important?
If you’re still wondering why estate planning is so important, there are at least four reasons to show why. Creating an estate allows you to choose who gets what upon your passing, gives you a chance to name a guardian for minor children, becomes a means of reducing taxes on what you leave behind, and most importantly, is a way of avoiding family strife and vicious legal battles.
What is an estate plan?
An estate plan is a collection of legal documents setting forth how you want your assets distributed when you pass away and how you want others to handle health and financial decisions on your behalf if you cannot do so yourself.
Essential estate planning documents
At a minimum, your estate should contain the following documents.
- A Will
- A Durable Power of Attorney
- A Medical Power of Attorney
- A HIPPA Release
- A Texas Living Will, aka Directive to Physicians
- A Designation of Guardian
- A Designation of Burial Agent
If you have created an estate plan in the past, this time of quarantining at home is an excellent time to review your plan. If you do not have these seven essential documents, contacting an estate planning attorney to complete the planning of your estate is highly recommended.
Estate planning tips for married couples
In the process of creating or revising an estate plan, married couples might want to consider the creation of a marital trust, which is a legal arrangement that allows a third party to hold valuable assets on behalf of beneficiaries. Possible advantages include tax exemptions and avoidance of the probate process. The Code has some pretty complicated rules, however, and in creating a trust, expert legal advice is highly recommended.
In addition to a marital trust in estate planning, it is extremely important for couples with children to include comprehensive trustee and guardian provisions for their children if a worst-case scenario occurs.
Estate planning tips for small businesses
Many small business owners are so busy with day-to-day demands that they may overlook the importance of estate planning. At any time, but especially during the present crisis, an estate plan and a business succession plan are essential to prevent chaos if an owner is incapacitated or passes away.
Here are three estate planning tips for small business owners.
- Business succession planning – When multiple owners are involved, a buy-sell agreement should be in place that transfers ownership when one of the owners passes away. Commonly, these buy-sell agreements give the surviving owners the ability to pay off the decedent’s beneficiaries in return for all the decedent’s share of the company. One great benefit of this kind of planning is that it eliminates the problem of having new owners stepping in who have no idea how to run the company.
- Life insurance – The company should have adequate life insurance on all owners to pay off the decedent’s heirs. Without adequate life insurance, the company might have to dip into working capital or secure a business loan to meet this obligation.
- A revocable trust – This document should be funded with business interests and state how those interests should be distributed in the event of death. A trust avoids probate, which typically causes delays and expense to the beneficiaries. Probate also stalls the ongoing business operations, something that can be avoided with a trust in place.
Assistance from Hammerle Finley
You can find additional estate planning tips and advice in our extensive collection of online resources. Here, you will find answers to many estate planning questions, but in the end, there is no substitute from the guidance and assistance provided by an experienced estate planning attorney. Contact Hammerle Finley today to schedule your initial estate planning consultation.