Dean Godfrey is currently the owner of Dean Godfrey Law, PLLC. Dean Godfrey Law operates in the Austin, Texas area and assists clients with a variety of legal services such as estate planning law, probate law, criminal defense, and mediation. In the following article, Dean Colin Godfrey provides a comprehensive guide to estate planning laws, discussing wills, trusts, and the importance of proper financial and healthcare directives.
1 out of 4 Americans who do not have a will say they would never get one, and over 40 percent say that they won’t bother getting one until their life is in danger.
Estate planning is one of the most essential parts of a comprehensive financial plan, but is also the most overlooked, with a large number of adults not having any form of estate planning, says Dean Colin Godfrey.
Additionally, Dean Godrey notes that having an estate plan is continuing one’s financial planning. It is important for building multigenerational wealth, ensuring that loved ones are provided for in the future, and for leaving a legacy.
Dean Colin Godfrey Details Estate Planning
The term “estate planning” refers to planning and managing an individual’s assets or “estate” in the event of their incapacitation or death. An estate may include bank accounts, stocks, pensions, land properties, vehicles, furniture, jewelry, insurance, investments, and other items of value.
Estate planning includes settling debts, estate taxes, and the bequest of the assets to heirs. Estate plans are typically set up with the assistance of a lawyer who is experienced in estate law. It can also involve other various professionals like financial planners, accountants, life insurance advisors, brokers, and bankers.
The practice of this law usually covers the following documents:
- Last Will and Testament: Dean Godfrey says that this is the core document associated with real estate planning. It expresses one’s wishes regarding the distribution of their assets in the event of their passing. It also identifies the executor or the one who will manage the estate for the testator.
- Advance Directives: Advanced healthcare or financial directives comprise two documents – the living will, a legal document that specifies one’s wishes regarding actions that should be taken for their health in the circumstance that they can no longer provide informed consent, and the power of attorney, a document that specifies another individual to make health care or financial decisions for them.
- Living Trusts: Dean Colin Godfrey explains, similar to a will, a living trust is a legal document that allows an individual to specify how their assets will be managed and distributed. However, living trusts take effect when the grantor is incapacitated due to injury or illness or as soon as the assets are retitled in the name of the trust. Wills, on the other hand, only take effect after the testator’s death.
Where to Start
- Hire a trusted estate plan lawyer. They will assist with estate planning, regardless of one’s state of wealth. They will also help identify the best type of estate plan for an individual.
- The next step is to create an inventory of assets. Include everything that has value, including jewelry, artwork, and collectibles.
- Name or update beneficiaries. Documents such as life insurance policies and retirement plans may have beneficiaries already designated but could be updated if one wishes to assign their assets to a specific person.
- Dean Colin Godfrey explains that one should also choose a guardian if they have children or pets they want to be taken care of after their death. They could also specify the individual that they want to make financial or medical decisions for them when they are unable to.
- The next step is to identify and establish one’s desired directives. This could include financial or medical care directives as well as a power of attorney.
- At this point, the lawyer should have prepared the necessary estate plan documents for the testator to sign and have notarized. Witnesses are required, so one should check how many witnesses are required in their state.
- Dean Godfrey says that keep the estate plan documents in a safe and secure place, somewhere where loved ones can easily locate them.
- Updates should be made to the documents following a major life event such as marriage, divorce, birth of a child, or passing of someone significant in the will. A good rule of thumb would be to check and update the documents every 3 to 5 years.
Dean Godfrey explains that estate planning is a powerful tool that can help individuals prepare for the unexpected and protect their loved ones in the event of their death. Contrary to popular belief, estate planning is for everyone, not just for high-net-worth individuals.