Estate Planning is not only the process by which you’re able to protect your assets and independence during your lifetime in the event of a physical or mental incapacity, but also is the process by which you’re able to guide and protect your family after death.
Below is a check list of documents and objectives to help get your Estate Plan in order and to review with a knowledgeable estate planning attorney:
1. Trusts: An after-death trust will spring into existence, usually by virtue of a will, after a person’s death. A living trust, on the other hand, is a trust made while the person establishing the trust is still alive. The living trust is commonly used to avoid Probate and keep the estate confidential.
2. Will: The Will is a legal document by which to designate the persons who will receive the assets you own upon your death. The Will is also used to name perspective guardians for children who are also minors.
3. Power of Attorney: A Power of Attorney is a legal document which expressly authorizes another person to manage your financial affairs. The Power of Attorney is often used to avoid costly and public conservatorship hearings.
4. Health Care Proxy: The Massachusetts health care proxy is a legal document, which provides for an individual’s right to determine the course of his medical care in the event of some future incapacity. The Health Care proxy is often used to avoid costly and public guardianship hearings.
5. Living Will: A living will allows a person who is unconscious or incapacitated to express his or her desires regarding the use of extraordinary measures to extend his or her life when there is no reasonable expectation that he or she will regain consciousness.
6. Estate Taxes: The federal government imposes a hefty estate tax at your death when your property is worth more than a certain amount. In addition, Massachusetts has its own estate tax which provides a much smaller exemption and also imposes an estate tax at your death when your property is worth more than a certain amount. Estate Planning can reduce and often eliminate estate taxes through various techniques.
7. Gift Taxes: If you give away more than $12,000 per year to any one person or non-charitable institution, you may be assessed federal “gift tax,” which applies at the same rate as the estate tax. However, there are several gifting strategies that a thorough estate planning attorney can implement to mitigate these effects.