Prepare Your Estate Plan: Lesson Objectives

In this lesson you will:

  • Learn what is included in an estate plan
  • Gain a basic understanding of estate-planning tools:
  • Power of Attorney
  • Property Ownership
  • Wills
  • Probate
  • Estate Taxes/Gifts
  • Trusts
  • Receive suggestions for hiring and working with an attorney
  • Increase your knowledge by reviewing several case studies

Have you put off making plans to distribute your property when you die?

There are many financial and emotional reasons for having an estate plan. Just think about the suffering and expense family …

Preparing a Checklist for Meeting with an Attorney

Young African American couple seated at table looking over documents


As you begin your estate plan and before you meet with attorneys and other financial advisers, it is helpful to assemble the following information. Having this information readily available will save you time and money in legal fees. It will also help you think through your wishes for distributing your estate. Use the Record of Important Papers, Household Inventory, and other forms in the Organize Your Important Papers lesson to assist you. Include in your list:

  • Names, addresses, and birthdates

Dying Without a Will

Image of young man holding blond child


Dying without a valid will is called dying “intestate.” If you die without a will, the laws of your state will govern how your assets are distributed. Whether you are single or married, it will be the laws of your state that determine how your property is transferred. You may also pay more in taxes for large estates.

To find an example of Kentucky’s property-distribution laws, go to http://www.ca.uky.edu/agc/pubs/fcs5/fcs5425/fcs5425.pdf and access the article “Estate Planning: Wills and Probate in Kentucky.” …

Deciding What to Include in Your Estate Plan

Young couple seated at table looking over documents


Once you have selected an attorney, decide what you want your estate plan to achieve before scheduling a second, longer meeting. Determine:

  • Do you want to make sure that your spouse/partner is financially secure?
  • What do you want to happen to the property you have accumulated?
  • Who will care for your minor children or aging parents?
  • Do you want your spouse and children to be provided for in an equitable manner?
  • Who will settle your estate in a timely and

Power of Attorney: Planning for Incapacity

Older man in a wheelchair


A durable power of attorney for financial matters is an effective way to arrange the handling of your business and personal affairs if you become unable to do so.

Our ability to handle financial affairs can be diminished by degenerative diseases such as Alzheimer’s, dementia, or serious accidents. It can happen to the young or the elderly. We never know if or when tragedy might strike.

A durable power of attorney is a simple, inexpensive, and reliable way to arrange …

Duties of and Selection Criteria for the Attorney-in-Fact

Couple shaking hands with an attorney


Duties of the Power of Attorney

A power of attorney gives a broad range of business and financial powers as specified in the document. Some typical powers in a very broad power of attorney might include powers to:

  • Do many personal business transactions or other acts that you could otherwise do
  • Sue in your name and collect money owed you from any source
  • Make gifts of real or personal property
  • Buy or sell property (of any type) owned in your

How to Hire and Work with an Attorney

An attorney, in his office, talking to a couple


If you want to draft a will, create a trust, or prepare a power of attorney, you will need to work with an attorney. An attorney is the only professional licensed to write legal documents. Look for one who specializes in estate planning or elder law. Complex estates such as those with investments, real estate, and/or business assets may require consultation with family members and financial management, tax, and legal experts.

Finding an Attorney

  • Ask people you know if they

How Property is Titled

There are several ways you may own real and personal property. The way in which you own property will determine what part of it—if any—you may give away. Moreover, state law defines the types of ownership. If you own property (i.e., real estate) in another state, the laws of that state will apply. For personal property, the laws of the state in which you claim residency will apply.

Joint ownership is a popular way to leave property to loved ones; …

Advantages and Disadvantages of a Living Trust

Advantages:

  • Avoids probate but not necessarily estate taxes
  • Administers property in different states with one document
  • Manages business and personal affairs during your life
  • Manages assets if you become incapacitated
  • Depending on state law, may protect separate assets in case of divorce
  • Can pay medical and other bills and provide for scholarships
  • Distributes assets faster to beneficiaries
  • Provides privacy

Disadvantages:

  • Expensive to draft
  • Involves costs to update
  • Expenses can outweigh benefits
  • Not court-supervised
  • To protect assets, the trust must be

Elements of a Valid Will

Image of a gavel, signifying order, and a scale, signifying justice


Factors that must be present in a valid will vary from state to state, so it is wise to check your own state’s requirements. Certain elements are often necessary:

  • Legal age: You must meet your state’s age requirements to make a will. Some states have exceptions for married minors and parents.
  • Sound mind: You must know that you are making a will, how much property you have, and the names of the descendents or relatives who should share in your