Many clients mistakenly assume that creating an estate plan is the only way to deal with inheritance choices. They also believe that inheritance planning and estate planning are one in the same. While the two planning strategies certainly go hand in hand, they are not synonymous. Let our estate planning attorneys explain inheritance planning and how it is different from estate planning.
What does inheritance planning involve?
Inheritance planning is basically a strategy involving various tools that make decisions about inheritances that are legally enforceable. In order for your inheritance plan to be effective, it must be legally enforceable. Otherwise, regardless of the type of property or how you want it distributed in the future, the plan may not operate the way you intend.
Despite assessing your property, determining how you want it distributed and to whom, if you do not take the appropriate steps, these decisions may have no legal effect whatsoever after your death. This is why the advice of an inheritance planning lawyer is so important. According to our estate planning attorneys, inheritance planning must be accomplished in specific ways.
Inheritance planning options to consider
Inheritance planning involves many of the tools that most people use in basic estate planning. Those include the last will and testament and revocable living trust. There are many other options available as well. An inheritance planning lawyer can explain all your options. The important thing to remember is your inheritance planning tools need to work in conjunction with one another. Having various estate planning tools and piecemealing them together will not work properly. Again, our estate planning attorneys can help.
Inheritance planning or estate planning: Which do I need?
Estate planning is essentially more comprehensive than inheritance planning. In other words, an estate plan will address many more issues than simply how to handle inheritances. Estate planning provides an important opportunity for you to prepare yourself and your family for death, as well as, the possibility of incapacity during your lifetime. There are many different options when it comes to estate planning. Choosing the right one will depend on your individual goals for the future. Our estate planning attorneys can help you create the perfect plan.
Why it is important to be prepared for incapacity?
The legal definition of capacity is the ability to comprehend the consequences of certain legal proceedings, including entering into contracts or signing legal documents. Incapacity could be caused by either a physical or mental condition and can be temporary or permanent. Now, when it comes to estate planning matters, incapacity refers to the ability of an individual to manage his or her own affairs and to make important legal decisions for him or herself.
Without an appropriate estate plan that addresses incapacity issues, you might end up being appointed a court-supervised conservator or guardian. This is why any inheritance planning lawyer will recommend including these types of provisions in your comprehensive estate plan.
Your plan can determine how your estate will be handled after your death
The other purpose of estate planning is to establish a plan for handling your estate after your death. One of the main estate planning tools used for this purpose is the Last Will and Testament, or Will for short. A will is basically a set of written instructions about how your estate should be distributed upon your death. A will can also give you a way to name a guardian for your minor children. One disadvantage of a will, though, is that your estate must go through the probate process before your assets can be distributed.
The basic elements of an estate plan
An appropriate estate plan should do more than simply state who should get your property after your death. Instead, a comprehensive estate plan should also include instructions for your care if you become disabled or incapacitated before your death. If you have minor children, it should name a guardian for them.
Your estate plan can include provisions for loved ones with special needs or disabilities, as well as, loved ones who may need financial assistance or asset protection. Your estate plan can include distribution of life insurance proceeds for your surviving family, disability income insurance if you become unable to work, and long-term care insurance to assist in financing your medical care in case of an extended illness or injury.
Join us for a free workshop today! If you have questions regarding inheritance planning or any other estate planning matters, please contact the experienced attorneys at Gaughan & Connealy for a consultation. You can contact us either online or by calling us at (913) 262-2000. We are here to help!