No matter how great or humble your wealth, you want to preserve it to provide for you and the support of your loved ones. At Estate Planning Group, we use customized and strategic planning to help you arrange your property and memorialize your wishes so that you may enjoy the peace of mind that comes from knowing that during your life, and after your death, your hard-earned assets will go where you want.
Over the years, estate planning has evolved into much more than simply a means for avoiding probate and tax planning. Through thoughtful and comprehensive planning, the use of revocable living trusts and other types of estate planning tools can provide you with control over your assets during your lifetime, and after you’re gone. Will your child be mature enough to handle an inheritance? Are you sure your spouse will not be manipulated into making poor financial decisions? Do you want to encourage your grandchildren to pursue an education, or discourage bad habits? With compassionate counseling and thoughtfully prepared documents, you may continue to guide your loved ones with your wisdom even after you are gone.
Does someone you love have special needs? Are you concerned that if you leave your assets to them, it will jeopardize their qualification for government benefits that are so important? Our planning can allow your assets to enhance your disabled loved one’s quality of life, without jeopardizing their qualification for government benefits.
Estate Planning involves knowledge of many areas of law including taxes, wills, trusts, insurance, retirement benefits, and property. In order to have an effective and thorough estate plan, knowledge of these areas is vital. Take comfort in knowing that Estate Planning Group keeps a sharp focus on these issues to serve you well.
Revocable Living Trusts
Revocable living trusts are created during your lifetime and are designed to take care of you, your loved ones, and your assets during the road of life and after you’re gone. You do not need riches to use a trust. Indeed, a revocable living trust is used to state your wishes on who will handle your finances, where your assets will go, and how your beneficiaries will receive them. Creatively drafted revocable living trusts can allow you to promote your values, discourage bad habits and protect your assets from unwanted creditors. Additionally, if properly funded, revocable living trusts can help to avoid the time-consuming and costly probate proceeding. Tax planning is also an essential part of trusts, as strategic planning and creative drafting can help you avoid taxes. Most people value their privacy, and a revocable living trust offers you privacy. Wills are public record at your death, whereas the terms of your trust are not.
If leave your estate to your loved ones using a will, or without a will (which is called intestate), everything you own will likely pass through probate. The process can be expensive, time-consuming, and it is a public proceeding. If you are married and have children, it is crucial that your surviving family have immediate access to your assets to pay for living expenses while your estate is being settled. It is not unusual for the probate courts to freeze assets for weeks or even months while trying to determine the proper disposition of the estate. Through revocable living trusts, your assets can pass to your loved ones without undergoing probate, in a manner that is quick, inexpensive and private.
Providing for Minor Children
If you have minor children, you understand that ensuring that they are cared for properly is crucial. Thus, it is important that your estate plan address issues regarding the upbringing of your children. Promoting your values, encouraging education or good grades, or discouraging bad habits can be done through proper planning. If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations. You should also consider the possibility of both you and your spouse dying simultaneously, or within a short duration of time. Through your estate planning documents, you can nominate the person you want as guardian and conservator for your children. Otherwise, the decision as to who will raise your children and manage your assets for them will be left to a court of law. And you certainly know what’s best for your children better than a court.
Planning for Death Taxes
Whether there will be any federal estate tax or state estate tax to pay depends on the size of your estate and how your estate plan works. The State of Hawaii has its own separate estate and inheritance taxes that you need to be aware of. There are many well-established strategies that can be implemented to reduce or eliminate death taxes, but you must start the planning process early in order to implement many of these plans.
Planning for Incapacity
We also help you to plan for incapacity for yourself and your loved ones. Without proper planning, the incapacity of you or your loved one will likely result in significant cost, court intervention, and loss of privacy. Given today’s privacy laws, fear of elder abuse, and fraud, caring for an incapacitated person is not easy without the proper tools. Many people are under the mistaken belief that their spouse or adult children can automatically take over for them in case they become incapacitated. To the contrary, in order for others to be able to manage your finances, they must petition a court to declare you legally incapacitated. This process can be lengthy, costly and stressful. Even if the court appoints the person you would have chosen, they may have to appear in court every year and show how they are spending and investing the assets. Designating someone you trust in proper legal documents will allow your family to be able to immediately take over for you so that they will have the authority to secure your care, withdraw money from your account, pay bills or take distributions for your IRA without unnecessary cost or delay.
Durable Power of Attorney
A Durable Power of Attorney is a document which allows you to appoint someone to step into your shoes and carry on your financial affairs in the event that you become incapacitated. Unless you have a properly drafted power of attorney, it may be necessary to petition the court to have a conservator appointed to make decisions for you when you are incapacitated. This conservatorship process is time-consuming, expensive, emotionally draining and often costs thousands of dollars.
In general, there are two types of durable powers of attorney: a “present” durable power of attorney in which your Agent’s powers are effective immediately; and a “springing” power of attorney which only comes into effect upon your subsequent incapacity as determined by your doctor. When you appoint another individual to handle your financial affairs on your behalf, that individual is called an “Agent,” or sometimes called an “attorney in fact.” Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend.
In addition to planning for the financial aspect of your affairs during incapacity, you should establish a plan for your health care. Hawaii law allows you to appoint someone you trust – for example, a family member or close friend to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself. You can do this by using an advance directive where you designate the person to make such decisions. The advance directive also informs others of your wishes about medical treatments such as the use of artificial life support or nutrition or hydration that is being artificially administered should you become permanently unconscious, terminally ill or otherwise unable to make or communicate decisions regarding treatment. Your agent can then ensure that health care professionals follow your wishes, and hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity. An advance directive is your written declaration of how you wish to end your days, and Estate Planning Group can guide you through these tough decisions.
Some medical providers have refused to release information, even to spouses and adult children authorized by Advance Directives, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. In addition to the above documents, you should also sign a HIPAA Authorization that allows the release of medical information to your Agents, Successor Trustees, family, and other people whom you designate.