One thing that may occur in the not too distant future is the elimination of the federal estate tax. It is something that President Trump called for during his campaign, and it has some people wondering if they’ll still need to worry about creating an estate plan if they do not have to deal with the issue. However, there’s a lot more to an estate plan than just mitigating the tax burden to heirs.
Estate plans also involve determining who will get property when the owners die as well as how this property will be distributed. Wills pass assets on upon someone’s death, but trusts provide people with a variety of options for how and when to provide heirs with funds. Trusts allow people to dole out assets over a period of time or when certain conditions have been met, such as graduation.
Powers of attorney are also important estate planning documents. They allow trusted individuals, or agents, to act on behalf of or make choices when the principal becomes incapacitated and is unable to do so. For instance, a medical power of attorney will allow an agent to determine how the principal should be cared for and what medical treatments they should undergo.
Along with creating documents like wills, trusts and powers of attorney, another important part of estate planning is ensuring that a plan is kept current. New laws at the state and federal level can change how estate planning documents work, and changes in people’s lives may also necessitate changes to estate planning documents. In particular, births, deaths, marriages and divorces tend to cause individuals to rethink powers of attorney and beneficiaries. A lawyer could assist in creating and maintaining an estate plan that complies with current law.
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