Welcome to the Law Office of Madge & Johnson. We are honored you have chosen us to be your estate planning attorney and we look forward to working with you to develop the estate plan that is right for you and your family. Below are the details of our estate planning process.
During this first phase, you and your attorney will meet to collect information about your assets, how they are owned, what the value of those assets are, how much they originally cost and if they produce any income.
Assets can include bank accounts, stock portfolios, business interests, life insurance policies, real estate holdings, including your home and any vacation properties, retirements accounts and if applicable, any high-value personal property such as antiques, jewels and artifacts. The attorney will want to know how your assets are titled (for example, in your own name, or joint with someone) and who you have named as a beneficiary (for life insurance, retirement accounts, and annuities). The collection of these assets is called your “estate”. In short, if you have a financial interest in something, we want to know about it.
Your attorney will ask you what your goals are, i.e., what you wish to accomplish with your estate plan. Frequent responses are probate avoidance, save estate taxes, protect assets from nursing home costs. Special circumstances in your family situation should be discussed, such as providing for a disabled child or wishing to leave more to one child than another.
We will want to know about the persons for whom you want to provide. These people are called your “beneficiaries”. How old are these people? Are they capable of handling complicated financial transactions? Are they good with money? Are they financially responsible? What is the likelihood that they will be sued or get divorced? These are all important considerations in determining how best to provide for the ones you love when you can no longer do it yourself.
The attorney will also talk with you about your family and whom you depend on the most. She will want to know your choice of agent to make financial decisions for you if you are unable to do so. She will want to know whom it is that you want to make healthcare decisions for you if you are unable to communicate such decisions or lack the capacity to make such decisions. She will also want to know about your general health, the likelihood that you could become incapacitated in the near future, and the impact your incapacity could have on your life and on your family members.
You must select someone to settle your estate at your death. This person will need to handle the financial affairs of sorting through your assets, paying your final debts, preparing your final tax returns, and distributing whatever assets are left to the intended recipients. This person is called an Executor or Personal Representative. In picking the right person to be Executor, you should keep in mind that this person will need to keep records of what is collected and paid out and ideally is someone that the remaining members of the family will respect. This person need not be experienced at probating estates, since this person will often hire an attorney to assist them with the proper court filings and to instruct them on how to perform the job being asked of them. However, it is helpful if this person knows something about your assets. In many cases, it may take more than one person to fulfill all of the duties. For example, your surviving spouse may know a lot about your assets and have the respect of your children, but may need the assistance of another family member to help with the record keeping and bill-paying functions.
If you and your lawyer decide a Living Trust is right for you, then you will need to select a Trustee. The financial duties of a Trustee are similar to the duties of the Executor. The Trustee is required to manage the assets of the Trust, to pay all of the debts of the Trust and to make distributions to beneficiaries pursuant to the terms of the trust.
If you have minor children or dependents for whom you are legally responsible, you will need to decide who should care for these persons in the event that you are unable to care for them yourself. This person is called a guardian. The right guardian need not be good with money; what is important is that s/he is a good fit for your minor children or dependents. For example, your brother is a “kid at heart” and loves your children and they love him, but he’s a financial disaster. He might still be an excellent choice to be a guardian, just make sure you have someone else to handle the finances.
These are tough decisions and are the ones that usually keep clients from moving forward with their estate plans. Your attorney will assist you in making the right choice. Furthermore, these decisions are not “fixed in stone”. As long as you are competent, you can change your mind and your estate plan. For example, if a week after you have decided to name your brother as guardian for your minor children you find out he is getting divorced, you can change your mind and pick someone else. If later on you reconsider, you can appoint him again. The same is true for who you pick to make decisions for you while you are incapacitated and who you pick to be the executor of your will. So make the best decision you can with the information you have right now and be ready to change your mind, and your estate plan, if necessary. If the only change you make to your estate plan is the name of your guardian and or the name of your executor, this can be done very easily and inexpensively.
If you have previously done an estate plan with another attorney and currently have signed estate planning documents, the attorney will want to review copies of these documents to determine how well they fit into your current situation or whether revisions are necessary.
Once we have a good idea of what your life is like and what is important to you, the attorney will make a variety of recommendations. As with many things in life, there will often be trade-offs. In making recommendations, we will point out these trade-offs and together you and the attorney will come up with a unique plan that meets your specific goals. Thus, the planning phase is really a joint effort between you and the attorney.
Sometimes the Planning Phase can be completed in a single meeting. Sometimes it takes several meetings, and/or a combination of meetings, follow-up emails and/or telephone conferences to complete this important phase. We stand ready to do “whatever it takes” to make you feel comfortable with your estate planning decisions.
The Document Preparation Phase
Once you and the attorney have developed your estate plan, we will then take this information and compare it against what you already have in place to determine what documents need to be prepared.
You may hear from us during this phase if a question comes up that was not decided during the Planning Phase, but otherwise this phase is primarily done by our office.
Generally, estate plans will be composed of a Will, as well as a series of documents known as “Advanced Directives” – Durable Power of Attorney, Health Care Proxy, and HIPAA Authorization. If appropriate to you, your estate plan might also include a Living Trust, Declaration of Homestead, and other complex documents.
Your estate plan will include a Will stating how you want your estate distributed. Your Will does not direct the disposition of assets held in joint name with someone, or having a designated beneficiary listed. So it is important that a review of all your assets be undertaken (see Implementation Phase, below) to make sure all your assets are distributed in the manner you have chosen.
The Will also appoints the Executor you select who will be responsible for settling your estate.
Depending on your circumstances, we may also prepare one or more living trusts and, if appropriate, perhaps even more elaborate instruments such as promissory notes, LLC’s, Family Limited Partnerships, and other contracts. If your assets include retirement plans or life insurance policies, we may draft new retirement plan beneficiary designation form or new ownership forms any life insurance policies.
The Durable Power of Attorney will allow you to designate someone to make financial decisions for you. The Health Care Proxy names someone to make medical decisions for when when you are unable to make them for yourself. The HIPAA Authorization identifies which family members may receive medical information about you. Taken together, these documents are designed to allow you to say what will happen in the future. Without them, a Court will be asked to appoint a guardian or conservator to make decisions for you; this is a very expensive and time-consuming process. We want you to make these decisions and these documents will implement your choices.
Depending on the complexity of your estate plan, this Document Phase may take from a couple of weeks to several months to complete. In some instances, some parts may move forward while other parts are held off until later. In these cases you and our office will work together to determine the schedule for the various parts of the estate plan.
The Implementation Phase
Once the necessary estate planning documents have been drafted, you will be sent copies of these proposed documents for your review, often with a letter explaining some of the key provisions and how they relate to the decisions made during the Planning Phase. You will be asked to review these documents and provide comments and corrections, if any.
If you do not understand the documents and how they work to carry out your estate planning goals, you should contact the paralegal assigned to your case to schedule a meeting with the attorney so that she may review them with you in person. We are committed to working with you to fully understand your documents and that you are comfortable with the choices you made during the Planning Phase.
Once you are comfortable that the documents reflect your estate planning goals, you will be ready to sign the documents. Usually the date for signing the documents will have been selected during the Planning Phase. Until the documents are signed, your wishes regarding your estate plan are not “official.” This means that if you die or become incapacitated before the documents are signed, you will have wasted the time, effort and cost you incurred in the Planning and Document Preparation phases. Thus, to maximize the value of your efforts, there should only be a short delay between the Document Preparation Phase and the Implementation Phase.
Usually, the Implementation Phase results in all documents signed at one time. Occasionally, it is necessary to divide the signing of your documents into several signing meetings, depending upon the complexity of your estate plan and the urgency of your situation. For example, you may have one meeting to sign your Will, Health Care Proxy, Power of Attorney and another meeting to sign change of beneficiary designation forms or to sign deeds to transfer real estate or change of account ownership forms to ensure that the title of your assets or the designation of your retirement account match your estate planning goals.
If the implementation of your estate plan is broken into multiple parts, it is important that all parts are completed to ensure that your chosen plan is ready to carry out your estate planning goals when the time comes. If you stop at the point of signing the legal documents such as the Will, Health Care Proxy, Power of Attorney, and if applicable any Trusts drafted, but do not sign the transfer documents; your estate plan may not work as intended.
The Monitoring Phase
Congratulations! You have your estate plan fully signed and in place!
Once you have signed all of the estate planning documents and have transferred any assets that need to be transferred and changed or added any beneficiary designations that are needed, you can relax and feel good about what you have done. You may not be able to decide when you die or if you will become incapacitated, but you have put into place a plan that reflect your decisions of what you want to have happen under such circumstances.
The only remaining task is to make sure that as your life and assets change that your estate plan follows suit. For this reason, estate plans need to be reviewed regularly. A good time to review your plan is after your annual tax return is prepared, since the financial issues and data collection are often contained in your tax returns. It is your responsibility to ensure that the estate plan and documents we prepared continue to reflect your estate planning goals.
We at Madge & Johnson, PC look forward to our alliance together to ensure that when the time comes your estate plan is there for your loved ones to use in carrying out your goals.