What is a Legal Concept? Does it Relate to Estate Planning?

A legal concept can be defined as a working tool of judicial reasoning and the art of doing justice according to law. Legal concepts can be considered as the building blocks of legal doctrine. All legal rules and standards are formed by combining legal concepts in various ways.

Estate planning done during a person’s life is the process of arranging for the management and disposal of a person’s estate, in the event of death or incapacitation. It includes bequeathing their assets to their beneficiaries or heirs, and the settlement of estate taxes. Estate plans are generally created with the help of an estate planning lawyer Miami, as they are well-versed with the legal concepts of estate law.

What are the key components of estate planning?

Estate planning can be pretty complex. From complicated legal documents to ensuring that you maximize the legacy left to your heirs, a lot goes into estate planning. However, good legal estate planning Miami consists of the following key components:

Will

When you want to create an estate plan, a will is perhaps the first thing that you will think about. Your will lays out who you want to take over your assets in the event of your death. It also helps ensure that your assets get distributed exactly the way you want them to. If you are parents of minor children, your will should also state who you would like to be the guardian of your children in case both parents die.

Trusts

A trust is a legal arrangement that allows a third party/trustee to hold property/assets on behalf of a beneficiary/beneficiaries. Trusts can be of different types and you can decide when and how the beneficiaries receive the assets in the trust. You may set up a revocable trust to help your estate avoid probate. Setting up an irrevocable trust can help limit your exposure to estate taxes. You may also create a testamentary trust, which is a trust inside of your will. However, testamentary trusts aren’t necessarily exempt from probate.

Power of Attorney

A power of attorney is a legal document that allows one person the authority to act on the behalf of another. You can designate someone to manage and look after your finances if you ever become incapacitated. If you are single, this could be a very important document as you do not have a spouse who could take up this responsibility instead of you. If you do not give someone the power of attorney, the court will assign a guardian to you, and it could be someone you do not view as an ideal candidate.

Health Care Directive

A health care directive is like a medical power of attorney. In a health care directive, you name a person to make medical decisions for you when you are unable to do so. There are two main documents involved- a living will and a health care proxy.

A living will is a legal document that outlines the level and type of medical care that a person wants to receive if they are incapacitated or unable to communicate their desires. A health care proxy is a legal document that allows you to designate someone to make decisions regarding your healthcare on your behalf when you are incapacitated. These documents can ensure that your wishes get carried out even if your family members are not in agreement.

Beneficiary designations

You will find beneficiary designations mostly on life insurance policies and retirement accounts. In the event of your death, it outlines who will receive the benefits. If there are different beneficiaries mentioned in your will, these beneficiary designations will supersede the ones on your will. It is, therefore, essential to review your beneficiary designations regularly.

Long term health care planning

Thanks to advancements in the field of medical science, people are living a lot longer than before. Long-term healthcare planning, therefore, has also become a crucial component of estate planning. Healthcare in the US is costly, especially long-term health care. Regardless of whether medical care is provided in a nursing home or a patient’s own residence, healthcare costs can deplete even the largest estates.

Long-term health care planning should include long-term care insurance or asset preservation if there is no insurance. However, you need to plan early for asset preservation. It is recommended to contact an estate planning lawyer Miami to explore your opportunities for asset preservation.