Estate planning is an essential process, not just for those approaching retirement but for individuals and families at all stages of life. Creating an estate plan provides certainty, both for yourself and your loved ones. However, estate plans vary widely based on a person’s individual circumstances, and it is essential to work with an experienced estate planning lawyer who can develop a custom-tailored plan that fits your needs.
At Batson Nolan PLC, we’ve been helping individuals and families address their estate planning needs for decades. Below is a brief estate planning guide for those interested in learning more about Tennessee estate planning.
The Basics of Tennessee Estate Planning
Estate planning involves a comprehensive review of your needs, both now and into the future. While most people associate estate planning with outlining their desires for how their assets will be distributed upon their death, this is just one small part of the estate planning process. By creating an estate plan, you can provide answers to the following questions:
- Who will make decisions on your behalf if you suddenly become ill or incapacitated?
- Who will care for your minor children in the event of your death?
- Who will administer your estate?
- How will your assets be distributed when you die?
Estate planning allows you to exercise some level of control over events that have not yet occurred. In addition, estate planning allows you to accomplish the following goals:
- Protecting assets from creditors;
- Reducing the impact of estate taxes;
- Limiting or eliminating the need for your heirs to go through the probate process to get their inheritance;
- Controlling beneficiaries’ access to funds;
- Planning for possible long-term care needs; and
- Planning for the future of a business.
To address your unique needs, an estate planning attorney will meet with you to discuss the various estate planning documents and how they can help you reach your goals.
Common Estate Planning Documents
While everyone’s estate plan should be catered to their own specific circumstances, most estate plans contain the following documents.
Last Will and Testament
Perhaps the most common—and arguably the most important—estate planning document is the last will and testament, or “will.” A will is a legal document where you outline how the court should distribute your assets upon your death. When you draft a will, you name an executor (also referred to as a personal representative). This person administers your estate. You can also name a guardian for any minor children in your will.
A trust is a legally defined relationship between at least three parties. The person creating the trust is referred to as the “settlor,” “trustor,” or “grantor.” That person creates the trust and names a trustee to oversee the administration of the trust. The trustee then manages the trust for the benefit of one or more beneficiaries. Trusts have a wide range of purposes, including the following:
- Avoiding probate;
- Reducing estate taxes;
- Protecting assets from creditors;
- Limiting the spending of beneficiaries; and
- Reducing income and assets for the purpose of qualifying for Medicaid.
Trusts are either revocable or irrevocable. Revocable trusts are the more flexible option; however, they offer fewer benefits.
Advance directives are essentially instructions to medical professionals and your loved ones about the type of medical care you want to receive should you become unable to speak for yourself. For example, you can name a trustee to make important medical decisions on your behalf or ensure that you do not receive life-sustaining treatment when there is no chance of recovery. Advance directives only become effective at the point you are incapacitated and cannot make or communicate decisions yourself.
Power of Attorney
A power of attorney is similar to an advance directive; however, powers of attorney deal with non-medical issues. When you execute a power of attorney, you give another person the ability to make financial decisions on your behalf. That person is called your agent. For example, your agent can buy or sell property, access your bank account, or file taxes on your behalf.
Consider Creating an Estate Planning Checklist
Admittedly, starting the estate planning process can seem overwhelming. However, it doesn’t have to be. The best place to start is by creating an estate planning checklist. Below are some of the questions to ask yourself when assessing your goals:
- What are your assets, including real estate, business interests, and personal property?
- Who will receive your assets after you die?
- Who will take care of any minor children or children who live with a serious disability?
- Does this person have the assets necessary to care for the child or children?
- How much do you need to live on after retirement?
- Is your current income sufficient?
- Do you have additional assets that may be subject to federal estate tax?
- Are you willing to give away assets to friends or family members?
- What are the gift tax, estate tax, and income tax implications of your decisions?
- Are you worried about your children receiving too much money at one time?
- Do you or your spouse anticipate the need for long-term care, either in a nursing home or through a home healthcare aid?
- If you own a business, who will take it over?
- Who do you want to take over your financial affairs if you become incapacitated?
- Where do you keep all your important financial documents?
- Does anyone else have access to your safe deposit box or other secure location where important documents may be found?
- Do you have a life insurance policy?
- Are you receiving an annuity?
- What estate planning instruments do you already have in place (wills, living trusts, irrevocable trusts, advance directives, etc.)?
Of course, you may not have considered some of these questions, and that’s okay. An estate planning attorney can provide you with valuable assistance in determining your needs and creating the actual documents.
Contact Batson Nolan PLC for Help Estate Planning in Tennessee
If you do not yet have an estate plan or have not updated your estate plan in years, reach out to the Tennessee estate planning lawyers at Batson Nolan PLC. Since our founding in 1860, we have earned a reputation throughout Tennessee as a leader in ethical and effective legal practices. Our attorneys will sit down with you to identify your needs and develop an estate plan that will provide your family with peace of mind for decades to come. To learn more and to schedule a free consultation, contact Batson Nolan PLC through our online contact form.