One of the most important responsibilities we have is to provide for the support and care of our loved ones after we have passed on. To fulfill those responsibilities, there are several documents that should be addressed now, including:
A will allows you to decide who takes our assets, and when. It also allows you to designate who will be responsible for implementing our wishes. If you don’t have a will, the State will decide who takes your assets, and a state probate court will be responsible for implementing the decision — a needlessly expensive and time-consuming undertaking.
B. Powers Of Attorney
If you become incapacitated, you can decide who will make your financial and medical decisions by executing Powers of Attorney now. If you fail to do so, the Court may assume that role — and at your expense.
C. Directive to Physicians
In the event of a tragedy, many of us do not want to be kept alive using artificial life support systems. To prevent that from happening, you can direct your physician to remove you from artificial life support, under carefully described circumstances. Designating decision-making responsibilities now can avoid a great deal of needless pain and suffering — and expense — for your family.
D. Medical Power of Attorney
If you are medically incompetent, you can designate someone to make medical decisions for you. This can save a great deal of hardship for you and your family.
E. Financial Power of Attorney
In the event of a tragedy, many of us do not want to have our finances managed by just anyone. To prevent that from happening, you can designate someone to have authority to manage your finances, under carefully described circumstances. Designating this responsibility now can avoid a lot of needless pain, suffering and expense.
F. Life Insurance Trust
The Internal Revenue Code imposes a tax upon our estate that can allow the IRS to confiscate as much as 35 percent. Often, life insurance is included in one’s estate for tax purposes. A properly drawn-up will and life insurance trust can help you avoid this tax, and can also protect your family from creditors. All of this must be done before you pass, by someone experienced in federal estate tax matters.
2. Estate Tax Audits
When we die, our executors are often required to file an estate tax return with the Internal Revenue Service. The Service will review — and frequently audit — the return in an attempt to assert a larger estate tax liability. All of the remedies available for income tax audits — including appeals conferences and Tax Court litigation — are available for estate tax audits as well.
We have represented many estates facing these issues.