Estate Planning incorporates the use of Wills, Powers of Attorney for finance, Powers of Attorney for Health Care, the possible use of trusts along with the proper titling of assets and beneficiary designations in such a way as to minimize or eliminate headaches and problems at the time of someone’s incapacity or death.
At Pifer Estate Law, our goal and greatest sense of accomplishment is being able to tell a client’s spouse and/or family members “this is going to be easy.” Pre-death planning is so much more than a will – it incorporates a plan that minimizes and possibly eliminates the court’s involvement which reduces both court fees and attorney’s fees which in turn reduces the amount of time before the deceased’s assets are available to their loved ones. The best plan is one that gets assets to the deceased’s chosen beneficiaries in a timely, inexpensive matter.
Another significant goal for our clients is to minimize issues during the incapacity of a loved one. We hope to plan so we can avoid costly guardianship hearings by making a plan in advance so if someone does become incapacitated, their bills can still be paid, their home managed and most important, their wishes are carried out. We accomplish this by using Health Care Powers of Attorney typically combined with a Declaration for a Desire for a Natural Death (otherwise known as a Living Will) as wells as Durable Powers of Attorney for financial, tax and legal matters.
We also incorporate releases for the Health Insurance Portability and Accountability Act (HIPAA Law) so that the person(s) appointed to make health care decisions for an incapacitated client will be able to access that client’s health information when the time comes. Asset ownership, titling, deeds and beneficiary designations can override a well-crafted will or trust so we work up a list of directions for the whole picture and share that with the client’s advisors with the client’s permission. Of particular concern are tax-deferred assets such as retirement assets – beneficiary designations must be well thought out on these assets in order not to trigger an unwanted taxable event. We also recommend a review with our clients every three to five years. We feel that is an ethical obligation to be sure all is still as the client desires with their documents and their titling of assets.
Estate Administration is the process of paying the decedent’s final bills, notifying creditors so that we cut off any surprise claims against the decedent’s estate down the road, and finally, distributing the decedent’s assets to the decedent’s beneficiaries, whether family members, trusts, charities or some combination thereof.
An inventory is due reflecting the date of death values of the deceased’s assets to the court within 90 days of opening an estate. The Will appoints the Executor (or Personal Representative) who is the person in charge of the decedent’s estate. If there is no Will, this person is called the Estate Administrator. Executors and Estate Administrators are given Letters of Testamentary or Letters of Administration and that is the “license” to collect the decedent’s assets, file the appropriate inventories with the court, do a notice to creditors, file taxes, pay final bills including court, CPA, & attorney fees, and eventually distribute the assets to the desired beneficiaries.
The Notice to creditors must run its course before the estate can be finalized and bill paid. Of course, the court has to “bless” this entire operation.
Most folks who own their business have worked hard to build and develop that business. In any well done estate plan, that business planning should be a part of the conversation. If the business owner dies, we want to keep it out of probate possibly by having it owned by the deceased’s trust to avoid transfer headaches.
Business owners are usually busy with the business itself and have not thought through these questions which won’t magically go away at the passing of the business owner. Time spent now looking at the big picture and making a plan will save family, friends, partners and employees much time and expense once that key business person passes.
Asset Protection (sometimes also referred to as debtor-creditor law) is a type of planning intended to protect one's assets from creditor claims. Individuals and business entities use asset protection techniques to limit creditors' access to certain valuable assets, while operating within the bounds of debtor-creditor law.
Many people, after both they and their spouse pass, will leave everything outright to their very responsible children in their estate planning. There are times when this is appropriate, but even then, there may be an advantage to putting particular assets into a trust and give those responsible heirs the immediate right to withdraw. Then, if something unforeseen is going on with that heir at the time of the decedent’s death - such as a lawsuit, bad marriage, and/or a judgement against them - that beneficiary can choose to leave their own assets in the trust, and the assets will likely be protected under NC or SC law. Of course, not all people have responsible children, and there are times we put assets into trust for life or give the children a staggered period where they can access the assets (such as 1/3 at 30, another 1/3 at 35 and the remainder at age 40).
The third party Trustee, whether family member or professional, or both, would have full discretion to access those funds for the beneficiary no matter the age of the beneficiary if, in that Trustee’s discretion, the expense was warranted. Many people don’t realize this is an option. Another issue we consider is asset protection for a spouse, particularly if that spouse is in a highly litigious profession, such as a doctor. We can set up a family trust to protect assets for the surviving spouse that will likely protect the assets not only from liability, but from second spouses as well, guaranteeing the assets will then pass to the decedent’s children after the second spouse passes away. This is obviously very important in a blended family situation.