Some Estate Planning FAQ’s
Estate planning can seem overwhelming, and people often have a lot of questions about the process.
We can help you understand some of these frequently asked estate planning questions:
Basics of Estate Planning
What is estate planning, and why is it important?
Estate planning involves creating legal documents to manage and distribute your assets after death and during incapacity. It’s important to protect loved ones, minimize taxes, and ensure your wishes are honored.
What happens if I die without a will?
If you die without a will (intestate), state laws dictate how your assets are distributed, which may not align with your wishes.
Wills and Trusts
Do I need a will if I don’t have many assets?
Yes. A will specifies how your assets are distributed and can name guardians for minor children, avoiding legal complications.
What is the difference between a will and a trust?
A will takes effect after death and goes through probate, while a trust can manage assets during your lifetime and avoid probate.
Do I need a living trust?
A living trust is useful for avoiding probate, maintaining privacy, and providing for incapacity, but it depends on your specific needs and assets.
Power of Attorney and Healthcare
What is a power of attorney?
A power of attorney is a legal document that grants someone the authority to act on your behalf for financial or healthcare decisions.
What is a healthcare directive or living will?
This document outlines your preferences for medical treatment if you’re unable to communicate, and it often includes appointing a healthcare proxy.
Taxes and Beneficiaries
Will my heirs have to pay estate taxes?
This depends on the value of your estate and federal/state tax laws. Most people fall below the federal estate tax exemption, but state rules may differ.
How can I ensure my assets go to the right beneficiaries?
Regularly update beneficiary designations on accounts like retirement plans and insurance policies, and specify them in your estate plan.
Special Considerations
How can I protect my minor children?
Use a will to name guardians and establish a trust to manage their inheritance responsibly.
What is probate, and how can I avoid it?
Probate is a court process to settle a deceased person’s estate. It can be avoided through living trusts, joint ownership, or beneficiary designations.
How can I plan for long-term care or incapacity?
Include powers of attorney, healthcare directives, and consider long-term care insurance or Medicaid planning.
Updating and Maintaining
How often should I update my estate plan?
Review it every 3–5 years or after major life events like marriage, divorce, births, or deaths.
Can I change my will or trust after it’s created?
Yes, you can modify or revoke most estate planning documents during your lifetime, as long as you’re mentally competent.
Practical Questions
How much does estate planning cost?
Costs vary depending on complexity, but simple wills are often less expensive, while trusts and comprehensive plans are more costly.
Do I need an attorney for estate planning?
While DIY options exist, consulting an estate planning attorney ensures documents are legally valid and tailored to your needs.
Digital Assets
What happens to my digital accounts when I die?
Include instructions for accessing and managing digital assets (e.g., email, social media, and online banking) in your estate plan.
Can I name someone to manage my online presence after death?
Some platforms (e.g., Facebook) allow legacy contacts, and you can address this in your estate plan.
If you’d like more detailed information or help creating an estate plan, feel free to ask!