If you’re like us, you’ve probably heard the term “estate plan” and immediately thought the concept was only for old folks (or the very wealthy). We get it. Truthfully, we didn’t fully know what an estate plan was either. Then we sat down with estate planning attorney Juliya Spiegel, who helped us understand why having an estate plan can be crucial, no matter who you are. If something were to happen and you were no longer around, an estate plan can even keep your grieving family out of court. It ensures that your hard-earned money goes directly to your loved ones, and can protect both you and the ones you care most about.
Put simply, the execution of an estate plan is much more efficient than a will, which is the concept most of us are familiar with. But having a will? Not as useful as you think in most situations, if it isn’t accompanied by a trust.
In fact, we asked that question – can’t one just get a will and call it a day – but wow. We were way off.
Here’s what we learned:
Q1. WMN / WRK: Who needs an estate plan? It seems like it’s something you only need to worry about if you are mega rich or heading into your golden years.
A1. Juliya S.: (Laughing) That is a very common misnomer that estate planning is only for the mega rich and/or old. The fact is that you need an estate plan if any of the following are true: 1) you have over $150K in monetary assets (like cash and investments), 2) own property, 3) have minor children, and/or 4) own a business.
Q2. WMN / WRK: So, having a will is no good?
A2. Juliya S.: A will is a good start if you have under $150K, don’t have kids, don’t have property and/or don’t have a business. Otherwise, you need a trust, which is part of an estate plan.
Having a will on its own does not keep your assets out of probate. A trust is very specific and will keep your assets out of probate.
Q3. WMN / WRK: Probate sounds bad, right?
A3. Juliya S.: Probate is very, very bad. Basically, if something were to happen to you and you didn’t have an estate plan that includes a trust, all your assets go into the state court system, a process called probate. Instead of you making decisions about who gets your assets and when, the state will now decide who gets your assets and how they should be dispersed.
The probate process is very lengthy and on average lasts 12 – 18 months. It is very costly and public. Now your grieving family has to petition the court to get access to your assets, which requires hiring and paying for an attorney AND paying money to the court. It’s more than just an annoying thing that happens – you are putting your family through potential financial strain to access your assets. If you have children and your children then go to live with their grandparents, now their grandparents have the added costs of caring for your children in addition to having to pay lawyers and the courts to get access to your money for things like school, food, clothes, etc. for your kids.
Q4. WMN / WRK: This sounds like a complete nightmare and clearly having an estate plan with a trust is crucial. Are they really expensive?
A4. Juliya S.: It is a complete nightmare! Compared to the risk and certainly compared to any probate attorney and court fees, an estate plan is pretty affordable. Many estate planning attorneys will charge a flat rate, which typically is between $2K – $4K for a complete estate plan. For my clients, the process on average takes about 3 weeks.
Q5. WMN / WRK: So what all is included in an estate plan?
A5. Juliya S. Your estate plan will include a trust, a pour-over will, powers of attorney, a health care directive, a HIPPA release, a living will and other important documents. I know that is a lot to take in so in simple terms, an estate plan will include a set of legal documents that manages your care and finances during your lifetime and then distributes your assets after your death, should something happen to you.
In your estate plan, you designate how and by whom your finance and medical decisions will be made if you were to become incapacitated or upon your death. If you have minor children, your estate plan will designate their guardian, and when/how they will inherit your assets. The big takeaway is that a comprehensive estate plan protects your hard-earned assets and legacy by allowing the bypass of probate, which as we’ve discussed is an expensive judicial process.
Q6. WMN / WRK: Lastly, what should people look for when choosing an estate planning attorney?
A6. Juliya S.: I strongly encourage people to find an estate planning attorney who is savvy and specializes in this particular type of law. Ask the attorney if estate planning is all they do or if they also practice other types of law. You don’t want someone who is going to provide you with a template, plug and play plan. You want an attorney who will provide you a customized approach and draft documents that specifically reflect your needs, family dynamics, and wishes. Also, you should feel very comfortable with this attorney because you are going to be sharing your most private and vulnerable information with this attorney – you want to feel safe and you want to feel like the attorney really cares.
To learn more about estate plans or to schedule a consultation with Juliya, you can find her and more information here at Spiegel Estate Planning.
Posted In: Legal Tips