Life is unpredictable. Effective estate planning helps individuals put their affairs in order and assists them in achieving peace of mind. An estate plan allows an individual to designate a person they trust to carry out their final wishes and oversee the distribution of their assets to the beneficiaries of their choice. Many falsely believe that estate planning is for the rich. The truth is that even individuals with modest assets and limited property should have a plan in place. Without a thorough estate plan, many complications may fall on those left behind as they are grieving their loss. Schedule an appointment with an experienced Tennessee estate planning lawyer with Shepherd and Long, PC by calling (865) 982-8060 today.
What Are the Two Most Important Purposes of Estate Planning?
While estate planning can offer a variety of benefits, most planners emphasize two primary objectives. These two important goals, which often work together, are the protection of beneficiaries and the minimization of taxes and expenses associated with the distribution of assets.
The Protection of Beneficiaries
One of the primary purposes of an estate plan is to protect the beneficiaries. Estate planning documents can provide instructions for how to distribute property and assets. Clear instructions in carefully tailored estate planning documents may reduce the likelihood of estate disputes and long-term probate litigation. Without an estate plan, beneficiaries must wait for the court’s approval to move forward with probate and distribute assets following the judge’s guidance.
Minimizing Taxes and Expenses
A detailed estate plan is a crucial tool to help minimize taxes while maximizing assets that pass to the estate’s designated beneficiaries. Using irrevocable trusts, gifting techniques, and other practical tools as part of a comprehensive estate plan can help reduce the size of the taxable estate and protect its property and assets.
What Do Estate Lawyers Do?
An estate planning attorney is seasoned in end-of-life planning and can provide essential legal advice throughout the entire process. These lawyers can help families with a variety of estate planning needs, including:
- Preparing the Last Will and Testament and other estate planning documents
- Identifying beneficiaries and prescribing the division of property
- Gathering information and drafting durable and medical powers of attorney
- Determining the most effective method for reducing estate taxes or avoiding them altogether
- Securing appraisals of valuable property
An estate planning lawyer with Shepherd and Long, PC, could go through all of the available options and customize an arrangement to meet the family’s unique needs.
Estate Planning vs. Will: Understanding the Difference
A Last Will and Testament is a legal document that directs what will happen to an individual’s estate after the person dies. The testator typically uses this document to establish who should receive their real property, financial accounts, and other valuable assets, and to name a trusted individual as their executor to probate the will and carry out the final estate duties. Testators who have minor children may also use the will to name a guardian in the event that the testator dies before the children reach their majority.
An estate plan includes other essential documentation regarding medical care choices in the event of incapacitation, transferring assets during life through a trust, and more. Some of the documents included in a thorough estate plan include the following:
- A Last Will and Testament
- Revocable or irrevocable trusts
- A durable financial power of attorney
- A living will with a healthcare directive and power of attorney
- Car titles and property deeds
- Beneficiary documents, including life insurance policies and retirement and other financial accounts
- Proof of identity documentation
- Funeral and burial instructions
What Happens Without an Estate Plan?
A comprehensive suite of estate planning documents can include the planners’ intentions for the money they pass to heirs, such as for educational expenses. Further, these documents may be used to specify burial wishes, establish an inventory of assets, and address outstanding debt.
According to Tennessee Code Annotated § 31-2-101, when someone without a living spouse dies without a will or estate plan, the estate must undergo intestate succession. During the process, the probate court judge will decide which family members will inherit the property and how to divide it between the beneficiaries. Tennessee’s intestacy laws give the property to the closest relatives beginning with children. When the deceased does not have living children or grandchildren, the property will go to siblings, uncles, aunts, and cousins. The state will take the property when the court cannot find any living relatives.
Who Can Make an Estate Plan?
Under Tennessee Code Annotated § 32-1-102, all adults (people 18 years and older) of sound mind have the legal right to make a will to instruct the distribution of their assets. A testator can revoke or change their will by destroying the will or the part of the will they wish to change. They should also include verbiage in the new will that replaces the will they revoked. Depending on the individual’s needs, estate plans may be relatively simple or complex. A sound estate plan will include everything the person owns, such as real estate, vehicles, financial accounts, life insurance, investments, and personal possessions. Even if the estate plan does not allow the estate to bypass the probate process, it can ensure the process goes smoothly and help to prevent family disputes.
5 Reasons Everyone Needs an Estate Plan
Estate planning is essential to arrange financial affairs and protect the estate’s heirs. While many think of estate planning as stressful, long, and tedious, it does not have to be time-consuming or complex. Working with an experienced attorney may help to simplify the process.
Five reasons everyone needs an estate plan include the following:
- Estate planning can lay out wishes for medical care and protect property and assets if the individual becomes incapacitated and cannot make vital decisions.
- An estate plan can help family members and other beneficiaries avoid the probate process.
- Careful planning can help reduce estate and transfer taxes the beneficiaries pay.
- Estate planning can protect assets from creditors.
- Careful planning and preparations can help secure family members’ future.
Speak With an Estate Planning Attorney Today
There are many advantages to working with an estate planning attorney. Effective planning allows individuals to determine who will receive their assets and handle their responsibilities in the event of incapacitation or at their death. No matter your age, estate planning is essential to protect yourself and your family and ensure they understand your final wishes. A thoughtfully prepared plan is one of the kindest gifts you can leave your loved ones. Schedule your private consultation with an experienced estate planning lawyer at Shepherd and Long, PC, by calling (865) 982-8060 today.