Do I Need an Estate Plan?
Do I Need an Estate Plan?
The simple answer is yes. But before telling you why it is important to know what is meant by the term “Estate Planning."
What is Estate Planning?
Most people think of estate planning as making a Will specifying who you want to receive your assets when you die. While that is true, proper estate planning also includes many of the following elements:
• Ensuring that you have named a Guardian for the care of minor children, along with funding a Trust for their care and education.
• Ensuring that assets are titled in a way maximizes the amount your beneficiaries receive and ensures the assets pass to the intended beneficiaries.
• Beneficiary designation planning for assets that do not pass to the beneficiaries named in your Will, such as retirement accounts, annuities, and life insurance.
• Minimizing death taxes so that your beneficiaries receive more of your estate
• Instructions for your care if you become disabled and can not make decisions for yourself
• Provisions for family members with special needs that do not affect their eligibility for government benefits such as SSI and Medicaid
Is Estate Planning Limited to Deciding Who Gets My Assets When I Die?
No. Just as importantly – and in some cases, more importantly – proper estate planning addresses unexpected situations that occur while you are still living.
A necessary element of estate planning is a properly drafted Power of Attorney (POA). In a POA, you give your Agent the authority to make all financial decisions for you that you could make for yourself. Contrary to popular belief, your Agent can act on your behalf even if you are not incapacitated.
A POA is the most powerful legal document you can sign because it gives your Agent the ability to take all your money. While this is rare, it does happen. Thus, the most important factor to consider when selecting an Agent is trust.
Additionally, a properly drafted POA allows your Agent to take necessary steps to, as much as is possible, protect your assets should you need to go into a nursing home. This simple step can potentially save hundreds of thousands of dollars that might otherwise be paid to a nursing home.
In addition to having a POA for financial matters, you should also have a Health Care Power of Attorney (HCPOA) for medical decisions. In an HCPOA, you are naming a Health Care Agent to make medical decisions for you if you are not able to communicate them yourself.
Many people have Living Wills setting forth their wishes should they be permanently unconscious with no hope of recovery, in a persistent vegetative state or an irreversible coma. However, Living Wills do not address situations in which you cannot make medical decisions but are not in one of the conditions listed above (i.e., dementia, Alzheimer’s disease)
A properly drafted HCPOA will cover both situations in addition to ensuring that the necessary HIPPA language is included allowing medical information to be released to your Health Care Agent.
What Are The Consequences of Not Doing Estate Planning?
Failing to do proper estate planning can lead to unnecessary legal fees and unwanted negative consequences such as:
• Your assets being distributed according to state law with your beneficiaries receiving less because more money is spent on unnecessary legal fees, court costs, and/or taxes.
• A court deciding who will care for minor children if you and the other parent die.
• Beneficiaries with special needs losing their eligibility for government benefits.
• If you become mentally or physically incapacitated, a court, rather than your family, may be able to control how your assets are used to care for you. Going through the court can be expensive and time-consuming. Plus, your information may become public, and it can be difficult to regain control if you recover.
• Inability to preserve assets to the maximum extent possible if you need to go into a nursing home.
• Your retirement accounts being taxed at up to 37% before being distributed to your intended beneficiaries.
When Should I Begin Estate Planning?
Because none of us has a crystal ball that can tell us when we will die or if we will become disabled, the time to begin estate planning is now while you are legally competent, in good health and free from emotional distress. Unfortunately, many people do not want to think about their own mortality, so they put it off.
If you do not take the time now, your family will be left to deal with it at the worst possible times, either while they are dealing with your incapacity or while mourning your loss.
Do I Need an Attorney for Estate Planning?
You are not technically required to use an attorney to do your estate planning. However, failure to do so is likely to lead to more costly problems in the future.
The experienced estate planning attorneys at Bingaman Hess can help ensure that as much of your estate as possible goes to your beneficiaries. They can ensure that your wishes are followed and that your estate is managed by someone you trust.
Give Bingaman Hess a call today at 610-374-8377
or find us online
to begin your estate planning and ensure peace of mind your yourself and your family.
News & Information
Business succession planning is an important process that helps business owners prepare for the upcoming transfer of ownership and leadership. Whether the transition involves passing the company to family members, selling to business partners or transferring ownership to outside buyers, having a clear succession plan helps reduce uncertainty and protect the long-term security of the business. A careful plan can also minimize disputes, preserve business value and ensure continuity in periods of change. Planning for Business Transfer The first step in business succession planning is identifying how the business will be transferred and who will assume control. Business owners should evaluate their long-term goals, retirement plans, and the financial needs of both the company and their family members. Some owners choose to pass the business on to children or relatives who are already involved in operations. Others may transfer ownership to key employees, business partners or third party buyers. Each option has different legal, operational and financial consequences. A successful transition often takes years of preparation. Potential successors may need leadership training, operational experience and gradual increases in responsibility to ensure they are ready to effectively manage the business. Good communication with family members, partners and stakeholders is also important to avoid misinterpretations and conflict. Business owners should work with legal and financial professionals to create formal succession documents, update corporate records, and establish a realistic timeline for the transfer process. Use of Buy-Sell Agreements Buy-sell agreements are an essential part of many succession plans. These legally binding agreements specify what happens to the interest of a business owner if certain events occur, such as retirement, disability, death or voluntary departure from the company. A buy-sell agreement typically defines who may buy the shares of the departing owner, how the business interest will be valued and the terms of payment. This structure helps maintain stability and prevents ownership disputes that could disrupt operations. For businesses with multiple owners, buy-sell agreements provide understanding and protections for all parties involved. They can prevent unwanted external ownership and ensure that remaining owners retain control of the company. Funding mechanisms are also important. Many businesses use life insurance policies to fund buyouts in the event of an owner's death. This allows surviving owners or family members to complete the transfer without putting financial hardship on the business. Tax Considerations Tax planning is an important part of business succession planning. If the transfer of ownership is not well planned, the business owner and successor will face a substantial tax liability. Depending on how the transfer takes place, the owners may face capital gains, estate, or gift taxes. With good planning, these tax burdens can be reduced with trusts, step-by-step ownership transfers, family partnerships, or changing the type of business entity. Another important factor is valuation. A proper valuation of a business is important for determining tax liability and ensuring that everyone involved in the transfer is treated fairly. Business owners should regularly review their succession plans with accountants, tax advisors, and attorneys, as tax laws are often changing. Regular updates keep the plan in line with changing legislation and the business’s needs. Let Us Help You Navigate the Essentials of Business Succession Planning Don’t wait! Talk to one of the experienced estate planning attorneys at Bingaman Hess today at 610.374.8377 or contact us online. This article is for informational purposes only and does not constitute legal advice. No one may rely on this information without consulting an attorney. Anyone who attempts to use this information without attorney consultation does so at their own risk. Bingaman Hess is not and shall never be responsible for anyone who uses this information. It is not legal advice.
Learn the key considerations in developing mixed-use properties, including zoning and planning requirements, legal challenges, and effective community engagement strategies.
Learn how contested guardianships are handled, including legal challenges, the rights of all parties involved, and the court procedures used to resolve disputes.
Learn how to choose the right business entity structure by comparing LLCs, S-Corps, and C-Corps, state incorporation benefits, and essential formation documents.
Learn how to navigate mergers and acquisitions with due diligence, deal structuring, tax efficiency, and post-merger integration strategies.
Learn how to manage risk in real estate transactions, from identifying potential issues to using insurance and legal strategies for protection.
Learn how to navigate municipal licensing and permits, streamline approval processes, and maintain compliance to avoid delays, fines, and project disruptions.
Understand the key differences between power of attorney and guardianship, including legal authority, applicability, and how to choose the best option for your situation.
Learn how property taxes affect real estate investments, including strategies for appealing assessments, using tax exemptions, and legally reducing tax liabilities.