Whenever you work long enough in a selected profession, you often find that there are common questions that arise and many times common misconceptions as well. Estate planning is no different. Here are five of the common misconceptions about this area of law:
"If I have a will, I will avoid the probate process, right?" Wrong! A Last Will and Testament will not help you avoid the probate process. A Last Will and Testament only informs the Probate Court how you wish to have your assets distributed upon your death.
"I can handle a decedent's Estate because I am the Power of Attorney." False. A Power of Attorney is a document that applies only during a person's lifetime. As soon as that person passes away, your authority ceases to exist. If you continue taking actions after a person passes away, you could become legally liable for actions taken.
"I heard a revocable trust protects my assets from the nursing home. Is that true?" Unfortunately, no. A revocable trust will not give you protection from the costs of nursing home care. A slightly different trust, called an irrevocable trust, can offer such protections, but it comes with a number of factors worth considering to see if such a tool is right for you. There are certainly other reasons to consider a revocable trust, but nursing home care protection is not one of them.
"Should I be worried about estate taxes?" While there may be taxes due at your passing, the estate tax (also called the death tax) is unlikely to be one of them. Under the 2017 Estate Tax rules, each individual can pass up to $5,490,000.00 at their death without having to pay any estate taxes. This high exemption level means that a very small percentage of the population will have to pay estate taxes.
"I do not need to have a trust because I am not wealthy." Wealth oftentimes has little to do with whether you would like a trust or not. More important, is evaluating whether the efficiencies of avoiding the probate process and avoiding potential conflict and time for your heirs, justifies the creation of a trust.
Unfortunately, these misconceptions have been repeated and shared so often that they are now viewed as true. To get started on your own estate plan, contact our office today! We offer an initial complimentary Life & Legacy Planning Session, where your goals and objectives determine what plan is right for you.
By far, one, if not the, most common question asked, is "How much does this cost?" Rightly so, attorneys carry the dubious distinction of being attentive to the time (see this article for an example), oftentimes, going as far to bill in 6 minute increments (or in 1/10 of an hour allotments). So, how much can you expect to pay for a will, a trust, or powers of attorney documents for your family?
While each attorney varies how they bill for legal work, there are three general approaches:
Hourly Billing. Just as it sounds, you are billed for the amount of time an attorney works on your particular legal matter. At the end of the day, the legal bill will depend on how long and complex the legal matter is and the time the attorney spent on the legal issue(s).
Contingency Billing. Here, the billing amount is based on the total amount recovered from the other party. For example, if you agree to a 15% contingency fee arrangement, and the total recovery is $10,000, the attorney would be entitled to receive $1,500. This type of billing approach is often utilized in personal injury cases and how attorneys (oftentimes the ones you see in commercials) can claim that you will not owe them anything in legal fees unless you win your case.
Flat-fee Billing. Flat-fee billing is often used when the legal work is for a particular legal transaction and not necessarily for an unpredictable, personal injury-type situation. This type of approach can have the added benefit of being more transparent on the front end, as you will know the total cost for the particular matter, without incurring additional and unexpected costs.
At The Estate Planning Group, we do things a little differently – we prefer to develop trusting relationships with families for life, so we can ensure you and your family are protected no matter what happens, and we let you decide on the appropriate plan and costs. All our estate planning services are billed on a flat fee basis, so you know the total costs before you make a decision.
The best way to determine exactly what planning will best suit you and your family’s needs and concerns is to meet with one of our attorneys for a Life & Legacy Planning Session, where we can help answer all of your questions, address your concerns, and meet your goals.
At your initial complimentary Life & Legacy Planning Sessions, we walk you through what would happen if something were to happen to you, how your family would handle things, and design a plan to make it easier for the people you love. By knowing what would happen, you can identify those things you want to address in your planning.
You, then get to choose the right planning tools from a point of understanding, not just have a lawyer whose motives may not be the same as yours tell you that you need this or that plan. We can then assist in designing the plan that will take care of your family. To get started, contact us today!
