In uncertain economic times, it is common that clients become more interested in the estate planning process and making sure their affairs are in order. At present, there is a particular interest in the asset protection aspect of the estate planning process. This article is the first in a series of articles that will address the estate planning process. This first article briefly covers a few basic estate planning tools. Future articles will address the use of trusts in estate planning and various asset protection planning techniques.
There are certain basic estate planning vehicles that everyone should have in place. The most basic is a will. If you haven’t written your own will, you do have a will; it’s just that your will is written by the State on your behalf. In Nebraska, your will reads something like the following: “I leave one half plus $50,000 to my spouse if I have a spouse. I leave the balance to my children even if my spouse is still living and the children are minors. If I don’t have a spouse, I leave everything to my children. I leave it to the State to decide on the guardian for my children and to establish a conservatorship to manage their inheritance. Regardless of how much my children inherit, they should have the right to all of it as soon as they turn 19. The handling of my estate shall be accomplished through an expensive probate process and no consideration needs to be given to tax effective methods of passing on my assets.”
A will is easy. If you don’t have a will and don’t want to consult an attorney, consider writing your own will. Nebraska permits holographic wills (which is a better alternative than most computer programs). Your holographic will is valid if it is in your handwriting, expresses what you want to do with your assets, and is signed and dated by you. If you have minor children, be sure to name a guardian.
Another basic estate planning tool is the advance directive. Advance directives express your desires as to what happens when health care issues arise for you. The possibilities in Nebraska include Declarations and Health Care Powers of Attorney.
The Declaration is commonly known as a “living will”. The Declaration comes into play when you are terminally ill or in a persistent vegetative state. The Declaration includes provisions specifying whether you want extraordinary life support measures and artificial nutrition or hydration. The Declaration usually directs in favor of total relief from pain even if it shortens life.
The Health Care Power of Attorney permits an agent to step in when the principal becomes “incapable” of making health care decisions. The Power of Attorney can incorporate the provisions of a Declaration.
As long as your advance directives are executed in accordance with the law of your state or residence, they are likely to be effective in most places when you travel. Consider having your advance directives available online (via a safe and secure source) in the event you need them while away from home.
Trusts are the next tool to be considered in estate planning. There are many uses for trusts. Those possibilities will be addressed in the next article.
© 2008 Parsonage Vandenack Williams LLC