What Is An Estate Plan? 3 Things You Need To Know

What Is An Estate Plan? 3 Things You Need To Know

When you have significant assets to protect, you need a well-constructed plan to secure what you’ve built and preserve it for your family in the event that you are unable to actively manage it yourself. Estate planning accomplishes this by organizing and structuring assets in a way that can be leveraged for the most effective long-term use in the event you become incapacitated or pass away.

When you’re serious about setting up an effective estate plan, it’s important to place a high priority on it to ensure your estate will operate as you desire and withstand legal challenges. At the same time, estate planning basics are easier to learn than most people think – especially with the following three things everyone should know about estate planning.

1. What an Estate Plan Consists Of

Imagine if you were suddenly gone or unable to manage you and your family’s wealth. What would they do? How easily could they, or a trusted figure, get hold of the reins and manage the assets they once relied on you for?

Think of an estate plan as a guide for your loved ones to follow in your absence – a long-term action plan that will guide your family and keep them secure, as though you were right there with them.

At its most basic level, an estate plan involves carefully constructed legal documents that include:

  • Last Will and Testament or a Revocable Living Trust
  • Formation documents
  • Letters of instruction
  • Powers of attorney and advance directives

In essence, the estate should be seen as a self-organizing entity with (1) an organizational structure that keeps assets protected and (2) clear and well-thought-out instructions for managing those assets from within that structure.

To better understand the value of an estate, it’s helpful to consider what could—or likely would—happen to your assets in the absence of an estate plan.

2. What Happens to Your Assets Without an Estate

Another core consideration of an estate is determining who will make key decisions on your behalf if you can’t. Most often, the unintended consequences of poor planning arises from failing to assign clear roles in the management of the estate.

If you don’t assign a trustee or executor or agent before it’s too late, a probate court judge will assign that role.

Consider what could happen if you didn’t have an estate plan in place, in which case a court may determine or impose any of the following:

  • Transfer of assets
  • Guardianship of your children or dependents
  • Increased inheritance or estate tax liabilities
  • Control of business assets

Proper estate planning can reduce, if not eliminate, all of these factors and remove them from the court’s reach.

3. An Estate Plan Helps Your Loved Ones Carry On

Aside from protecting your legacy from avoidable legal actions, a properly planned estate carries numerous other benefits for your family and business partners. The crux of an estate is to help them use what you’ve built to maintain their quality of life and further your legacy in your stead.

With this keystone firmly in place, numerous other benefits naturally follow:

  • Medical, home, and other care for you and your loved ones in the event of injury or illness
  • Elimination of familial or legal infighting over your family’s estate
  • Reduction in the chances of your will being probated
  • Long-term care for your spouse (through, especially, a lifetime trust)
  • Inheritors can more easily locate and access your assets per your wishes
  • Protection for minor beneficiaries who are not prepared to manage wealth
  • Protection for adult beneficiaries from unscrupulous family members
  • Financial protection for survivors against scams and fraud
  • Legal protection of assets from unforeseen lawsuits or debt collections
  • Administration of financial arrangements even after your passing

Extending Your Legacy Indefinitely

An estate plan may be likened to nothing more than a few strategically arranged legal and financial documents, but the essence of it goes well beyond paperwork. It amounts to the closest thing possible to provide your loved ones with crucial long-term wealth management strategies in your stead.

To learn more or request an estate planning consultation, contact us and see how a simple but powerful estate plan can be for you – or, more importantly, your loved ones.

Frequently Asked Questions

If the probate court’s role is to determine who the proper heirs are, why avoid it?

Even if a probate court is perfectly fair and equitable in their judgments, they will assign fees out of your estate to the court officers and attorneys involved – and all because you lacked a few essential documents.

The court essentially would act as the executor – the one overseeing the execution – of your will, but if you’ve appointed trust management roles yourself, along with clear, legally binding instructions, there will be no controversy for the court to hear. A proper estate plan saves everyone time and saves your survivors more of what you wanted to pass on to them.

How many different trusts are there, and how do I know which one is right for me?

Most states have slightly or even quite significantly different trust laws, meaning an exact answer is dependent on your jurisdiction. Further, knowing which estate suits your particular needs requires thorough study and analysis. You’ll save time and set your estate up most effectively by contacting a competent estate planning attorney. Call Johnson Legal, PLLC at 910-319-7373 to make an appointment today.

Author Bio

Shane T. Johnson is the CEO and Managing Partner of Johnson Legal, an estate planning and business law firm in Wilmington, NC. With years of experience in estate and business law, he has zealously represented clients in various legal matters, including small business formation and purchasing, estate planning, probate, domestic violence, and other legal cases.

Shane received his Juris Doctor from the University of Wyoming and is a member of the North Carolina Bar Association. He has received numerous accolades for her work, including being named among the Best Probate Lawyers in Wilmington by

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