Basic Estate Plan - Highly Recommended!

In 2007, I lost someone I loved very much to cancer. From the date of diagnosis in June of that year until his death in August, it was a mad scramble to put his financial and emotional “house” in order. It was a difficult time for me, struggling with anticipatory grief and challenged by constant caretaking as his health and spirit declined. I was forced to participate in end-of-life decisions that we had not put a lot of thought into due to our middle age and plans for the future. Although it needed to be done, it was not the time to add more challenges to an already stressful situation.


In 2011, someone I love very much was finally discharged as “cancer free” after three separate bouts with the disease. Vacillating between gratitude and relief, I am still historically and keenly aware of how unpredictable and uncertain life really is and how naïve I was to think I had some control over time and circumstance.

Having experienced both ends of the spectrum, there appears to be several common denominators. Estate planning requires objectivity, expert advice, exploration and quiet reflection. It is important for many people to ensure that their families and financial goals are met after their death. No matter what a person’s net worth is, it is important to have a basic estate plan. It is also important to discuss your wishes with your heirs to avoid confusion and conflict after you die.

A basic estate plan should include a will, a financial power of attorney and an advanced health-care directive. These basic estate documents address after-death issues like who is to receive any assets, who is handling the financial affairs and who is responsible for making medical decisions upon an individual’s medical incompetency. A trust may be the chosen vehicle for some people depending on their estate planning goals. Tax consequences are always an important consideration in estate planning and people should seek competent legal and financial counsel regarding these matters.

A will indicates exactly where you want your assets to go upon your death. Dying without a will, or dying intestate, leaves it to the laws of the state where you die to determine how your assets are to distributed. This may not coincide with your own personal wishes, and adds delay to the administration of your estate. A will is also the best place to indicate who you want to be the guardian of your minor children if you die before the children reach the age of majority. Even if you have a trust, a will is used to distribute assets outside of the trust. A person’s assets may include real estate, personal property, bank accounts, business interests, insurance policies, investments and retirement accounts.

Trusts allow people to put conditions on how and when their assets are to be distributed. Trusts are often used to reduce estate and gift taxes. Trusts are also private documents and avoid the delay and publicity of probate court. There are several ways to give gifts to your heirs that are tax free and reduce the value of your overall estate. A person may give up to $13,000 a year to an individual or $26,000.00 if you are married and the gift is from you and your spouse. People may also pay unlimited amounts of medical and education bills if the monies are paid directly to the institution where the debt was incurred. People may also donate to a charitable fund as the investment grows tax-free and allows individuals to make contributions given before and after they die.

It is important to seek competent legal and financial counsel in drafting your estate plan. It is equally important to have those documents done before there is a need for them.

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(As published in My Generation magazine: http://www.keepmecurrent.com/my_generation/finance/basic-estate-plan-highly-recommended/article_dcd55884-74f5-11e1-a555-0019bb2963f4.html. )
 
Mary-Anne E. Martell is founder and senior legal Counsel for Seacoast Law & Title, 1399 Bridgton Road, Westbrook, ME 04092. She welcomes questions and/or comments at law@seacoastlawme.com and can be reached at (207) 591-7880.