Many people believe that all estate plans are the same – that is hardly the case.
Every client we work with is unique – they all have different assets and distinctive family situations. When we meet with a client for the first time, we review the assets of their estate and we discuss their family situation in order to determine which level of estate planning they need.
While every client’s estate plan is unique, every client’s estate plan can be categorized into one of three levels – Basic, Intermediate and Advanced.
Level 1: Basic Estate Plans
A Basic Estate Plan consists of a Will, a Power of Attorney of Property, and a Power of Attorney for Healthcare.
Will: A Will is a document that states your final wishes and how you would like your Estate Assets distributed. It is important to know that a Will only covers “Probate Assets” – assets that do not have a beneficiary designation (Click Here to Learn More About Probate Assets). A Will also appoints your Executors (who will manage your Estate after your passing) and a Guardian for any minor children you may have.
Power of Attorney For Property: A Power of Attorney for Property gives an agent authority to make property-related decisions on your behalf if you are unconscious, mentally incapacitated, or otherwise unable to make property-related decisions for yourself.
Power of Attorney For Healthcare: A Power of Attorney Health Care is where you appoint an agent to make medical decisions and access your medical records on your behalf if you are unable to make Health-Care related decisions for yourself.
Basic Estate Plans work best for people who do not have complicated family situations, no estate tax issues and whose assets can be transferred through beneficiary designations.
Level 2: Intermediate Estate Plans
An Intermediate Estate Plan is an estate plan that needs either a Will with Children’s Trust or a Simple Revocable Living Trust.
Will with Children’s Trust: Anyone with minor children (or adult children in their 20’s or 30’s) should consider including a “Children’s Trust” in their Will. If both you and your spouse were to die, your assets would be divided equally among your children and those assets would be placed in trusts for each child until they reach an age designated by you in the Children’s Trust. You also appoint someone to act as the Trustee of the Children’s Trust to manage the assets and to make distributions for your child’s health, education, maintenance and support while the assets are in the trust.
Simple Revocable Living Trust: Revocable Trusts are trusts are simpler trusts that people create primarily to avoid probate for their estate. These trusts are very flexible and whoever creates a Revocable Living Trust has complete control over the assets they place in the trust during their lifetime.
An Intermediate Estate Plan works best for people that need a simple trust for purposes of avoiding probate only and/or for people that need a trust set up for their children or heirs for some reason. These people generally do not have estate tax or asset protection issues to worry about.
Level 3: Advanced Estate Plans
Advanced Estate Plans use a combination of Wills, Revocable Living Trusts, Irrevocable Trusts and Limited Liability Companies for liability protection; asset protection, and estate tax avoidance. These people can also have much greater control over these assets after they die with an Advanced Estate Plan.
Advanced Estate Plans are for people with medium to large businesses, large estates and/or blended families.
What Kind of Estate Plan Do You Need?
At the Ritchie Law Office, Ltd., we start our Estate Planning process off with a Ritchie Legacy Planning Session. During this initial consultation for new estate planning clients we:
Create a customized “Probate Asset Analysis Diagram” so you can easily see how all your assets would be transferred upon your death;
Discuss your family situation and how that would effect what type of estate plan you need;
Determine what needs to be done for your estate to avoid probate;
Determine if your estate plan needs to reduce estate taxes.
At the end of your Ritchie Legacy Planning Session you will know if you need a Basic, Intermediate or Advanced Estate Plan and what the process and fees will be to get your estate plan done.
Estate Planning is what we do at the Ritchie Law Office, Ltd. To get started with your Estate Plan, call our Office at 309-662-7007 and schedule your Ritchie Legacy Planning Session.
This article is a service of Attorney Chad A. Ritchie and the Ritchie Law Office, Ltd.
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