While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones.  Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs in the event that you pass away or become disabled.

At Vaughn-Martel Law, our comprehensive approach to estate planning includes protecting real and personal property, designating health care and financial decision-makers, living wills, ensuring access to medical information and records, identifying preferred caretakers for minor children, as well as end-of-life, burial and other considerations.

A well-crafted estate plan can provide for your loved ones in a more efficient manner by avoiding guardianship during your lifetime, as well as probate, estate taxes and unnecessary delays and expenses at death.  Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family in case the worst happens.

Click here to obtain a copy of our simple Schedule of Flat Fees for estate-planning clients.

Providing for Incapacity:  Finances

Many people are under the mistaken impression that their spouse or adult children can automatically manage their finances and property in the event they become incapacitated.  The truth is that in order for others to be able to manage your finances, they must petition a court to declare you legally incompetent.  This process can be slow, costly and stressful.  Even if the court appoints the person you would have chosen, they may have to come back to the court every year and show how they are spending and investing each and every penny.  If it is your desire that a spouse or loved one of your choosing immediately take over and carry on your affairs in the event that you are incapacitated, you must designate such a person or persons in carefully drafted legal documents, including a comprehensive Power of Attorney.

Providing for Incapacity:  Medical Care and Decision-Making

In addition to planning for the financial aspects of your affairs during incapacity, you should establish a plan for your medical care in the event that you are unable to make or communicate medical decisions.  The law allows you to appoint another person - for example, a family member or close friend - to make important medical decisions on your behalf if you lose the ability to decide for yourself.  In Massachusetts, this is accomplished by executing a Health Care Proxy that designates another trusted person to make such decisions on your behalf.  In addition to a Health Care Proxy, you may also wish to execute a Living Will which informs others of your preferred medical treatments such as the use of machines to keep you alive and other extraordinary measures should you become permanently unconscious or terminally ill.  Living Wills are not legally enforceable in Massachusetts, but can provide direction to your Health Care Proxy and doctors as they carry out your wishes.

If you leave your estate to your loved ones using a will, almost everything you own will pass through probate.  The probate process can be expensive, time-consuming and is open to the public.  The probate court is in control of the process until the estate has been settled and distributed.  If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled.  It is not unusual for the probate courts to freeze assets for weeks or even months while trying to determine the proper disposition of the estate.  Your surviving spouse may be forced to apply to the probate court for needed cash to pay current living expenses. You can imagine how stressful this process can be.  With proper planning, certain assets and property can be passed on to your loved ones without going through probate, in a manner that is quick, inexpensive and private.

It is important that your estate plan address issues regarding the upbringing of your children if something should happen to one or both parents.  By making certain appointments in your Will, you can provide for the designation of persons you’d like to manage your assets as well and care for upbringing of your children if both you and your spouse should die.  By using a trust, it is possible to appoint a trustee to manage your assets after death for the benefit of your minor children.  Otherwise, the decision as to who will manage your finances and raise your children will be left to a court of law.  Even if you are lucky enough to have the person or persons you would have wanted selected by the court, they may have undue burdens and restrictions placed on them by the court, such as having to provide annual accountings.

Upon death, the Internal Revenue Service will review your estate to ensure that you don’t owe one final tax: the federal estate tax.  Whether there will be any tax to pay depends on the size of your estate and how your estate plan works.  Many states have their own separate estate and inheritance taxes that you need to be aware of.  There are many well-established strategies that can be implemented to either reduce or entirely eliminate estate taxes, but you must start the planning process early in order to implement many of these plans.

Do you want to benefit a charitable organization or cause?  Your estate plan can provide for such organizations in a variety of ways, either during your lifetime or at your death.  Depending on how your planned giving plan is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes.