Estate planning is one of the most important things that you can do for your own security and to protect your family. Many people, however, do not know what should be included in their estate plan and are not sure where to start in making a comprehensive plan.
Unsworth LaPlante, PLC can provide assistance with the creation of an estate plan that ensures you are ready to address end-of-life issues and that ensures you can leave a strong legacy. We assist you with making use of all available legal techniques and using all legal tools that Vermont makes available for the estate planning process.
You can give us a call to find out more about common estate planning techniques, and you can also review the 10 estate planning techniques below to find out more about some of the basic components of a comprehensive estate plan that our legal team can help you to create.
Top 10 Estate Planning Techniques
While there are many different estate planning techniques and your plan needs to be personalized to your specific situation, 10 common techniques used in estate planning include:
- The creation of a last will and testament: A last will and testament is the most basic of estate planning tools. It allows you to provide instructions for the distribution of assets. However, a last will and testament is actually fairly limited, as you give up control over assets you leave to heirs or beneficiaries in a will and you are not able to use a will to reduce estate tax or to otherwise protect assets.
- The creation of living trusts: Living trusts are useful to ensure the appropriate management of assets in case of incapacity and to facilitate the transfer of assets in the trust administration process instead of through the more complicated, time-consuming and costly probate process.
- The creation of irrevocable trusts: An irrevocable trust can be used for many important estate planning purposes including providing protection of assets. Unlike a living trust, an irrevocable trust can be beneficial in protecting assets in case you must get Medicaid to cover your nursing home care and can also be useful in keeping assets safe from creditors and estate tax.
- Creating family limited partnerships: Family Limited Partnerships can be used for many purposes including asset protection, to enable gifts of money and property while retaining control, and to reduce the amount of estate assets which will be subject to taxation. Because an interest in the partnership can be given, rather than outright ownership of assets, substantial valuation discounts are also possible.
- The use of pay-on-death accounts: Pay-on-death accounts can facilitate a timely transfer of your assets to your loved ones. The probate process can take several months, which is a problem if your heirs or beneficiaries are depending upon their inheritance to provide them with funds if you were the breadwinner and your income is no longer coming in. By using pay on death accounts, you can make it possible for your loved one to get virtually immediate access to account funds when you pass away.
- Joint ownership: If you would prefer to have property transfer immediately after a death, joint ownership is another option for you. You can structure ownership as joint tenants with rights of survivorship in order to facilitate the immediate transfer of assets to those who are co-owners with you.
- Inter vivos gifts: Many people will decide to give gifts during their lifetime, rather than waiting to transfer all of their property until after their death. If you are able to keep your annual gift giving below the threshold that you are allowed to give each person before gift tax kicks in, you can transfer assets via inter vivos gifts without having to worry about tax implications. Giving gifts over your lifetime could reduce the total value of your taxable estate after you pass away, potentially saving your heirs a lot of money if your estate is taxable.
- Creating a power of attorney: A power of attorney is a powerful tool that protects assets during the course of your life just in case you become incapacitated by sickness or injury. Instead of a period of uncertainty while your family goes to court to try to get control over your assets, you can make certain a trusted, capable agent takes over management of your wealth immediately in the event of incapacity.
- Creating advanced directives for healthcare: Advanced directives for healthcare give you the chance to evaluate what kinds of medical treatments you want under specific circumstances, such as when you have an end-stage terminal illness or when you are sick or hurt and would not be alive without machines. The use of advanced healthcare directives ensures you make some of the most difficult decisions about your care in advance so your family does not have to make these choices, while selecting a healthcare proxy also means you get to select who makes the decisions that you haven’t specified in advance.
- The purchase of life insurance: You can purchase insurance in order to make certain that your loved ones are provided for in case something happens to you. This is important if you are a breadwinner and if you are concerned about the possibility that your family’s quality of life could suffer if something happens to you and you cannot provide for them any longer.
You should carefully consider what you hope to accomplish with your estate plan so you can ensure you use the best tools to protect your autonomy, protect your family, and secure your legacy.
Getting Help from an Estate Planning Lawyer
Unsworth LaPlante, PLC has the experience and skill necessary to help you use these estate planning techniques and to help you to explore all of the different strategies that can work to make your comprehensive plan. You can download our free estate planning worksheet to find out more. You can also give us a call at (802) 879-7133 or contact us online to get personalized advice from a Vermont estate planning lawyer.