Estate Planning 101: Answers to our most frequently asked questions 

What is a Will?

A will is a document where you indicate who gets what and who is in charge of making that happen. A will is critical for your estate plan and if you don’t have one, the state’s inheritance laws will apply. An heir or beneficiary is someone named in the will to receive your assets.  The person you put in charge of making that happen is called a personal representative or an executor.

If you have a will, you need to make sure that it matches everything you jointly own and that it does not conflict with any named beneficiaries on other asset documents, such as a life insurance policy.  A common myth people have is that if they have a will, their estate won’t have to “go through probate.”  You will still have to go through probate with a will, but the judge will be able to follow your directions instead of the state’s.  While a will is a critical element to estate planning, it is not a magical document that covers every scenario.  Plus, your will only becomes effective when it goes through probate and is validated by the court.

One major scenario that a will does not cover is if something happens to you and you become incapacitated.  A will only allows your wishes to be followed when you pass away, not if you are injured and unable to care for yourself or your loved ones.

What is an Estate Plan?

An estate plan is a plan that comprehensively covers a lot of contingencies beyond who gets what. Estate planning also covers incapacity, disability, and guardianship. If you have minor children, you want to make sure that in the event of a short-term emergency, there will be directions and authorizations for who can be with your children overnight or for a short period. This could be different than who you want to raise them as long-term guardians.  Your will could name a long term guardian, but only proper estate planning can protect your children in the immediate situation.

An estate plan will be comprised of your will, maybe a trust, healthcare directives, powers of attorney, financial directions, and many more important documents.  It covers a lot of pieces, from incapacity and disability, to passing away to what happens long after that.

Do I Need More than a Will?

The short answer is yes. A will says who gets what, but that is not the only question to answer when someone dies. Estate planning covers all the other scenarios - what if you are in an accident and are incapacitated; what if you become disabled; who should be in charge of your medical decisions; who should be in charge of your assets;  who should care for your minor children if you are in the hospital; who should raise your children if you cannot; is there someone you do NOT want raising your children; who should take care of your pets; how long do you want to be kept alive if you are in an unrecoverable state; who should be notified right away…so, yes, you definitely need more than a will.

What is a Living Will?

A living will sometimes gets confused with a last will and testament, or will, which are documents that state how your assets will be distributed after you have passed away. A living will is a document that applies while you are still alive. If you become incapacitated or disabled, having a living will allows you to be taken care of the way that you want. If you have children, this is a way for you to put into writing what happens if something were to happen to you. Keep in mind, a living will covers what will happen while you are still alive – a will covers what will happen after your death.

How do I Choose the Best Guardian for My Children?

This question can be very difficult to answer for some people.  If something happens to you or your spouse, you want to make sure that you have selected a guardian that would most likely mirror your parenting and discipline philosophy or style.  Someone that is in line with what you believe or who would be willing to continue to instill those beliefs in your children for you.  And, keep in mind that over the years, as your children grow and your life changes, those people you’ve chosen may also change.  That is why it is so important to regularly review and update your estate planning. 

 We can make this whole process easier for you.  If you haven’t already, sign up for our free Kids Protection Plan here.   And you can get a copy of the best selling book on estate planning for busy parents, Wear Clean Underwear, by Ali Katz, here.

What is Probate?

“Where there is a will, there is a probate.” – Phil Kavash

Probate is, by definition, the process where a will is proven valid and the deceased’s assets are distributed by a court.  In other words, when someone dies their will is first filed with the probate court, a judge determines if the will is authentic, and then the court authorizes the distribution of the deceased person’s property based on the wishes of the deceased person.  If there was no will or it is proven invalid, then the judge orders the person’s property to be distributed according to that state’s inheritance laws. 

An executor or administrator is the person in charge of making sure that your assets go to the heirs you name or those who are legally entitled to them by law.  If you name a person in your will, the judge will authorize that person to administer your estate by distributing your assets to the people you wanted to have them.  If you do not have a will, the judge will appoint someone to act as executor or administrator. 

Probate court is also the court system that has the responsibility to make sure any minor children are being taken care of if their parent or guardian passes away.  If there is no will or a will’s validity has been challenged, a judge will have to determine who will be in charge of the minor, including raising them, managing their assets and financials, and making medical decisions for them.    

You can think of probate court as the process of a judge making a plan for you if you pass away without one.  

What is a Trust?

A trust is a private legal agreement between the trustmaker (owner) of assets and the trustee (person who manages the agreement) for the benefit of the beneficiary (person who ultimately receives the asset). 

Think of a trust as a better substitute for a will. A will says who gets what, under what circumstances, and who is in charge of making that happen. A trust does the same thing, but the critical difference is a trust does not need to be filed with the court and can step in the minute you pass away.  Considering it can take months or years for the court to settle an estate, having the ability to access your assets and funds immediately to take care of your loved ones is a huge advantage.

Additionally, a trust is a completely private agreement between the trustmaker, the trustee and the beneficiaries.  It is not public information, does not have to be filed anywhere and only those named in your trust are entitled to see it.  The public process of probate is essentially for the benefit of creditors.  A trust, on the other hand, benefits only you and who you want it to benefit. 

Typically, you will be the trustee of your own trust and when you pass away, a successor trustee (that you have chosen) will immediately step in and take control without the hassle and cost of having everything approved through probate court.

Are Trusts Only for the Rich?

You have probably heard people say that trusts are only for wealthy people or only if you have net worth of XX number of dollars or more. That is not the approach that we take at Spatz Law Group. Instead, we take the time to first educate our clients and then let them decide whether a will or trust based estate plan is the best route for their family. It has nothing to do with how much you own or might own or your net worth. It has everything to do with how prepared you want your family and loved ones to be in the event something happens and how efficient and easy it will be for them. 

Why Shouldn’t I Do Estate Planning Myself?

You absolutely can do your own estate planning and these days there are fill in the blank documents and online DIY sites to help you.  If all you want is a set of legal documents, there are plenty of resources available for you to use, whether you look online or shop around for the lowest priced traditional estate planning attorney.  Keep in mind, you will get what you pay for - and only what you pay for. 

The most common feedback from clients is that the approach we use is so much more than just a set of legal documents.  We ask questions you would never have known to ask.  Clients were comforted in knowing that those questions were explored and the answers put into their estate plan. 

Estate planning is much more than just signing a document - it is about planning.  You want everything covered so you have the peace of mind that your life and legacy will be passed down for generations, not just distributed to the right people.

What is the Biggest Myth about Estate Planning?

There are actually two myths that we run across over and over. One is that a lot of people think that a will covers every estate planning scenario, all you need is a will and you’re good.  If you have read this far, you already know that is absolutely not true.  Myth number two is that a lot of people believe that if they are incapacitated or disabled, their significant other or spouse can automatically and exclusively act for them.  This is unfortunately not true.  Even if you are married, your spouse does not automatically have the power to make decisions on your behalf.  If you do not have powers of attorney or healthcare directives set up, your spouse would actually have to go to the probate court to get the authority to make decisions.  

How Much Does Estate Planning cost?

As you can imagine, we get this question quite frequently.  There is no “one size fits all” solution for every family, in any area of law, and that holds true for estate planning.  If a lawyer can tell you exactly what your plan would cost via email or over the phone without a comprehensive discovery process, it should raise red flags – because this is exactly why so many estate plans fail.

Families shop around based on price and end up with a traditional plan, which is basically a set of documents that oftentimes does not actually work when the family needs them.  To read more about this, please read my article on “how shopping around for an estate plan could leave your family with an unexpected, expensive, unintended mess.” 

Our estate plan options are based on affordability and effectiveness.  We have streamlined our estate planning process into three meetings, each with a specific purpose and a valuable goal.  From our initial meeting where we educate you and help you prepare by creating a complete inventory of your assets to our final meeting about two months later where we review and confirm all parts of the plan and conduct a legacy interview for your family. 

With all of that in mind, the initial Family Wealth Planning Session is a value of $750.  If you commit ahead of time and come to this first meeting prepared with your inventory and assessment completed, then we waive this fee from your plan cost because it saves us time and saves you money. 

Even if you never do any planning with us, the preparation for your Family Wealth Planning Session alone is a valuable process for you and your family because you will know exactly what you have and where it is located.  And if you decide to hire us to prepare your estate plan, the cost is usually between $2,000 - $8,000, depending on the level and complexity you choose.

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