Estate planning allows you to provide for your family’s future, plan out your end-of-life care, and ensure your assets go where you want them to. A comprehensive and enforceable estate plan is essential to secure these plans and limit the issues your family and loved ones have after your death.
The Main Components of a Kansas City Estate Plan
A comprehensive estate plan includes:
- A Will: This allows you to state the individual and entity inheritors to your assets and properties.
- A Trust: This document explains the beneficiaries of your estate. Assets in a trust stay out of probate court, which can save your family time and money and protect those assets.
- Durable Power of Attorney: This document gives someone power of financial decisions if you are unable to make those choices.
- Medical Power of Attorney: This gives someone power over medical decisions if you become incapacitated.
- Medical Directives: Your medical directives outline what healthcare treatment you allow.
A complete estate plan ensures that you are taken care of at the end of your life and that your family doesn’t have to deal with the courts as much to make these decisions or distribute your assets. An effective estate plan is made with an estate planning attorney to ensure it is legally enforceable after your death and continuously updated throughout your life.
Benefits of an Estate Plan
There are several benefits to a comprehensive estate plan. This includes:
- Protecting Yourself and Your Interests
Documents like the durable power of attorney, medical power of attorney, and medical directives provide guidelines for your care. Though few people expect to be incapacitated at the end of their life, it’s fairly common, and accidents can happen during life. It’s important to plan for these things.
Durable power of attorney allows someone to handle financial plans and decisions. This includes managing your bank accounts and paying bills. Medical power of attorney designates someone to be in charge of personal decisions and medical care decisions. These powers of attorney may be provided to a loved one, family member, or professional. Medical directives can list hospitals you want to receive healthcare at, what procedures you allow, and other specifics.
Without these documents, things can become difficult if you are suddenly incapacitated. Your family must petition the court to receive power over your healthcare and finances. This is a potentially lengthy process during a period of time when decisions need to be made quickly.
- Protecting Your Loved Ones
A comprehensive estate plan keeps the majority of your estate out of probate court. Probate is how the state of Missouri distributes assets after your death. Without a trust, your entire estate will enter probate, taking months to years to sort and distribute. This costs your family money and time during a period when they need to grieve.
Without a will, probate court will appoint executors to distribute your estate. These executors will likely not know how you want your estate to be handled. Under Missouri’s laws, your estate will pass to specific family members and to the state if you have no family. In Missouri, intestate inheritance laws start with your spouse, then any of your children and their descendants. This may or may not be how you want your assets distributed.
If inheritance laws do mirror how you want assets distributed, it’s still in your interests to create an estate plan. That way, you can choose the executor of your will and the trustee of your trust. Additionally, it prevents the lengthy and stressful probate process.
A legally valid estate plan can also determine who cares for your minor children.
- Asset Protection
For many people, asset protection is why they create an estate plan. Estate planning allows you to determine beneficiaries, whether they are individuals or business and nonprofit entities. When you have control over who is distributing your assets from your trust and estate, you can feel more confident about distribution after your death.
Estate planning also allows you to keep your finances and assets private. By creating a trust, you can keep the majority of your assets out of probate and, therefore, out of the public eye. Assets that go through probate become public information.
It’s important to create an estate plan that will be legally enforceable after your death. Otherwise, the time and planning will be for nothing, and your assets will go through probate and the intestate process anyway.
FAQs
Q: Why Is Having an Estate Plan Important?
A: An estate plan ensures that your assets are distributed where you want them to be. A comprehensive plan keeps assets out of probate, saving your loved one’s time and money. It also can explain your wishes for medical care at the end of your life and designate those to take care of your financial and medical decisions. An estate plan also determines custody of your minor children.
Q: What Are the Three Primary Goals of Estate Planning?
A: The essential goals of estate planning are:
- To have guidelines and legal authority granted for your end-of-life care;
- To protect your estate and assets during your life and after your death so they provide support and benefits to your beneficiaries; and
- To lessen costs and stress for your beneficiaries while maximizing the financial benefits.
Q: What Are the Important Factors to Consider in Estate Planning?
A: Essential considerations to make while planning an estate include:
- The needs of your beneficiaries. Different beneficiaries have different spending habits or financial requirements. Consider these while making plans.
- Your finances. Ensure you understand your assets and how they will change over your lifetime. This includes the rising cost of living.
- Potential changes in your life. Retirement, growing families, marriage, divorce, and family deaths are all important considerations. You could plan for some or change your estate plan later.
Q: Does Missouri Have an Inheritance Tax?
A: No, Missouri does not have an inheritance tax. Missouri also doesn’t have an estate or gift tax. Though this lessens the effect probate can have on your estate, it’s still an expensive legal process that can limit the benefits your inheritors receive. Additionally, inheritance taxes from other states could still apply.
Benefit Your Loved Ones and Protect Your Estate
Contact Stange Law Firm today to begin planning your legally valid estate plan and get all important aspects covered.
