Is Your Estate Plan Thoughtfully Constructed? | Kansas & Oklahoma Estate Planning

While most people do not have an estate plan in place, there are those who have made minimal efforts. There are websites on the Internet that sell legal documents including last wills. Maybe you are among those who have pieced something together using one of these downloads or worksheets under the idea that anything is better than nothing.
Anything is better than nothing in some cases, but it may not be better in others. If you had no last will all of your assets would be passed along to your closest relative or relatives using intestacy laws of succession.

A last will that is improperly constructed can cause a host of problems, and in some cases it may have been better for the individual who constructed the faulty will to simply do nothing.

However, responsible people should indeed take responsible actions with regard to arranging for the future transfer of their assets. You should also consider the possibility of incapacity later in your life.

Effective Asset Transfers
There are a multitude of ways to transfer assets to others. You can do this while you are living, and you can arrange for the transfer of the assets to take place after your passing.

How you go about it will depend on your financial situation and your unique personal objectives. For example, let’s say that you are a surgeon. You are inherently vulnerable to lawsuits.

Asset protection would be a very important objective for you if you were in this line of work.

There is also the matter of the federal estate tax. The exclusion is $5.25 million, and the maximum rate is 40%.

As a result, if you had $15.25 million in assets and you arranged for transfers through the utilization of a last will rather than a tax efficient vehicle of some sort $10 million would be subject to this 40% tax.

There are different legal devices that can be used to facilitate tax efficient asset transfers.

There are other unique circumstances that call for advanced planning techniques, such as providing resources for someone with special needs without impacting his or her government benefits.

Incapacity Planning
People often become incapacitated during the latter stages of their lives. Sometimes they are completely physically incapacitated, and of course other seniors suffer from diminished mental capabilities.

To account for these eventualities you should have a living will in place that expresses your choices regarding the use of life-support measures.

You should also have a health care proxy or durable power of attorney for health care with which you select an agent who would be able to make medical decisions for you if you become unable to communicate.

And finally, you should have a durable financial power of attorney with which you empower an agent to handle your financial affairs should you become incapacitated and unable to manage them for yourself.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday