Estate Planning
What is Estate Planning?
When most people think of estate planning, they think of getting a Will drafted. A Will is an important part of an estate plan, but estate planning includes more than that. Estate Planning involves ensuring the orderly and efficient disposition of your property at your death and reducing any legal and financial problems if you become disabled.
What does a Will do?
- Transfers property according to your wishes at your death including making gifts to a church or charity
- Names a guardian for minor children
- Explains how taxes and expenses are to be paid after your death
- Names an Executor to handle your estate
What happens if I die without a Will?
If you pass away in Indiana without a Will, your property will be distributed by terms made by the Indiana legislature. The legislature has created different distributions which are highly dependent on your circumstances.
For example if you are married without children when you die, if you have a living parent, your surviving spouse only receives 3/4 of your property and, the remaining 1/4 goes to your parents.
Do I need a Will?
You need a Will...
- If you do not want the Indiana legislature to determine how your property is divided
- If you want to name a guardian for minor children
- If you want to set up a trust for a disabled family member
- If you want to give money to a charity or church
How often should a Will be updated?
It is a good idea to review a Will every three to five years.
Additionally, a Will should also be reviewed after significant events such as
- your marriage or divorce
- the birth of a child or grandchild
- your children reach adulthood
- you relocate to a new state
- you have a significant change in your assets
- one of your beneficiaries becomes disabled.
Should I have a Trust?
There are many kinds of trusts and reasons for having a trust can vary. Some reasons to have a trust include
- Providing resources for your disabled child or spouse after you are gone
- Ability to leave your assets to your children and ensure that they will be managed according to your values and wishes
- Reduce estate taxes and probate fees
- Protect your assets from creditors
Beyond a Will, what other estate planning documents do I need?
In addition to a Will, an estate plan will often contain documents such as a General Durable Power of Attorney and an Appointment of Health Care Representative to plan for your incapacity. In certain circumstances it is advisable to have a trust in addition to your Will.
What is a General Durable Power of Attorney?
This document allows you to choose someone to manage your finances and property. Because most of us will experience a period of incapacity due to an accident or illness, everyone should consider having a General Durable Power of Attorney. Without a power of attorney, your family may have to go to court and have a guardian appointed to handle your financial affairs if you become incapacitated.
What is an Appointment of Health Care Representative?
This document names a person to make health care decisions for you if you cannot make them for yourself. Indiana allows your spouse, parents, adult children, and adult siblings to make health care decisions for you.
However, all of those people have equal say in your care if you have not designated one as your health care representative. Also, in the absence of family, a significant other or close friend will not be able to make decisions for you without having been named health care representative.
How can estate planning help me?
A properly drafted estate plan can help
- save money by reducing legal fees if you become incapacitated, reduce the cost to your heirs to probate your estate and reduce any taxes owed on your estate
- provide peace of mind for you and your family
- reduce conflicts in your family after you are gone
What is Probate?
Probate is a legal process involving the courts through which a decedent’s Will is administered to pay debts and taxes and transfer the property owned by the decedent to the people named in his will.