By Joshua Friel
Estate planning is the process of determining what happens to you and your property if you become disabled or when you die. Planning ahead of time enables you to make choices regarding your property and your health instead of those choices being made for you by a court. Estate planning can be divided into two broad categories: planning for your life and planning for your death.
Planning for your Life
Many people experience a period of disability or incapacity in their life. Here, disability or incapacity occurs when a person is not able to make decisions for themselves and does not necessarily refer to a physical disability. Disability can include short periods of time, such as when you are under anesthesia during surgery, or longer periods of time for people with Alzheimer’s or dementia. The important question to ask yourself is, “When I cannot make decisions for myself, who do I want to make those decisions?”. There are three documents that can appoint someone you choose to make those decisions and explain what choices you want made:
- A power of attorney for health care decisions empowers a trusted person of your choice to make decisions about your medical treatment.
- A power of attorney for financial decisions empowers a trusted person of your choice to make decisions about your finances.
- A living will or advanced directive explains your wishes for what treatment you want, and what treatment you do not want, and when to end life support. Making those decisions now, for yourself, can save your loved ones the difficult decision.
Planning for your death – probate
Most people are more familiar with estate after someone has died, also known as a decedent’s estate. If the deceased does not have a will, or if there is property that remains in the name of the deceased person upon their death, that property must be probated. If you have a will, that will must be filed with the court to become accepted, and the estate must be administered, which is the process of collecting money owed to the decedent, paying debts of the decedent, and distributing property. If you do not have a will, and your property remains in your name upon your death, Missouri law has default rules about where property will go.
Probate is a public proceeding, which means that most of the filings will be public records. There will often be a notice published to notify creditors to file a claim if you still owe money upon your death. In addition, probate can be costly. There are filings fees for probate, publication fees, and attorney fees. If that does not sound good to you, keep reading for some alternatives.
Planning for your death – avoiding probate
Missouri has several laws that permit you to make a binding designation to say who gets your property upon your death. These “non-probate transfers” enable you to choose where your property goes after you die, while bypassing the need to probate the estate in court. There are different types of documents depending on the type of property you want to avoid probate.
Real estate: can be transferred to those you choose using a beneficiary deed that is recorded with the county recorder. A beneficiary deed is revocable as long as you are alive, so you can still change your mind about who you want to give the property to, or if you decide to sell.
Titled vehicles: vehicles, including ATV, trailers, boat/vessel and motors, that must be registered can be transferred upon your death with a “title on death,” “transfer on death” or “TOD” designation. This designation will make sure the vehicle goes to the person you named on the title and will avoid probate.
Financial accounts: these accounts, including retirement, investment, savings, and checking, allow you to designate a “pay on death” or “POD” beneficiary. Your financial institution will have forms you can use to make this designation.
Tangible personal property: for your tangible property that does not fit in the above categories, you can use a beneficiary bill of sale. This document must be signed before you die, and will automatically transfer the property listed on the document to the person(s) of your choice without needing to be probated.
Trust Planning
A trust is a document that lays out rules for what happens to your property and is another method of avoiding probate. A trust can come in many forms including living trusts, special needs trusts, and testamentary trusts. Trusts can be drafted to provide both for your living wishes, such as what happens if you are disabled, and for what you want to happen to your property after you die.
Conclusion
Thinking about your own death or disability is not a pleasant thought for anybody. But there are things you can do now to make sure that your wishes are honored, and the burden is lessened for your loved ones. The experienced attorneys at Andereck, Evans, Lewis, Figg & Battagler can help you plan for the future and put your mind at ease.
