Estate Planning 101
As an Estate Planning and Administration attorney I am committed to providing education to encourage as many folks as possible to create a movement to increase their net wealth through strategic estate planning. My firm’s goal is to reach increasing numbers of people to empower this movement. With that being said, my work has demonstrated that there is a lack of understanding on basic issues that will help strengthen this movement. In the past I have taken for granted the level of understanding in the community on these matters. As a result we have created a glossary for adults to help shape the thinking that can fuel this movement. As a start I encourage all adults, once they turn eighteen years old, to have an estate plan.
- Advanced Directive aka Living Will – a document that gives direction about the specific actions that should be taken for their health when they are no longer able to communicate personal desires.
- Asset Protection Planning- the strategic consideration of reviewing assets and holding vehicles that protect resources from creditors, mismanagement of descendants or family disputes.
- Estate- the net worth of a person at any point in time alive or dead. The sum of a person’s assets less liabilities at the time.
- Estate Planning- the process of anticipating and arranging for the disposal of an estate during a person’s life.
- Reduction of Taxes
- Eliminate uncertainties over the administration of probate
- Guardian – a person who has the legal authority (and the corresponding duty) to care for the person and property interests of another person
- Guardianship for incapacity senior – Arises when someone legally determines that a senior has become unable to care for their own person or property.
- Guardianship for minor- The designation from a parent or legal entity to exercise the authority of a legal guardian.
- Guardianship for adult with developmental disability – The appointment of a guardian (and the corresponding duty) to care for property and interests of another person.
- HIPPA -Health Insurance Portability and Accountability Act- Legislation which creates the standard of maintaining the privacy of a person’s medical care and information. This goes beyond the death.
- Incapacity-The inability of a natural person to determine whether they may make binding amendments to their rights, duties and obligations.
- Intestate – The description of a person who dies without making a valid will.
- Last Will and Testament – The declaration by which a person (testator) names one or more persons to manage his/her estate and provides for the distribution of his/her property at death.
- Medicaid Planning- The asset management strategy that creates eligibility for Medicaid for institutionalized care that takes into consideration community spousal needs as well as transfer penalties.
- Power of Attorney – A document that gives someone you choose the power to act in your place regarding financial and business matters.
- Spring Authority – Gives Authority when the principal is unable to act on his/her own behalf
- Durable Power of Authority- becomes effective upon execution
- Power of Attorney for health care
- Probate – A legal process where the decedent’s purported will if any, is entered into court, after hearing evidence from the representative of the estate, a personal representative is appointed by the court as a fiduciary to close out the estate, known and unknown creditors are notified (through notice or publication in the media) to file any claims against the estate, claims are paid out (if funds remain in the order or priority governed by state statute, remaining funds are distributed to beneficiaries named in the will or heirs if there is no will and the probate judge closes out the estate
- Pour Over Will- A testamentary device that upon death any assets in the estate at the time of his or her death shall be distributed to the Trustee of the Trust.
- Probate Avoidance – Due to the time and expenses associated with the traditional probate process. Includes strategies like 1) Revocable Living Trusts 2) joint ownership of assets and naming beneficiaries 3) making lifetime gifts, and 4) purchasing life insurance.
- Tax Considerations – Income, gift and estate tax planning that impacts the estate planning process.
There are quite a few concepts that may be new. This is a language that is not familiar to many people. Yet it’s a conversation that is vital to understand as we build the legacies for our families.
By: Aimee D. Griffin, Esq.
Featured Article in The Washington Informer – March 2016