Estate Planning: peace of mind starts with a plan

“The reason most people don’t plan is that they simply don’t know where to start.”

– Karyne Mora, Head of Legal and Human Resources.

Here is a universal fact: nobody is eternal and one day we won’t be there anymore.

Looking at reality is sometime scary, and it can even paralyze us from acting and doing what is best for our loves one and us. Unfortunately, only few families have taken the time to create simple legal documents to protect their family and legacy when that day comes.

No matter your age or stage of life, it’s never too early to make your wishes known.  Estate planning is a simple process that releases the burden from your loved ones and ensures that your assets are not by default taking by the state or someone you don’t want. Put simply, estate planning is the process of making certain that your assets will be distributed according to your wishes after your death. Also, a solid estate plan should always include methods for managing and protecting your estate should you become incapacitated during your lifetime.

Who Needs an Estate Plan?

A lot of people mistakenly believe that estate plans are only for large estate holders or older individuals with sizeable financial net worth.  That is not the case. If you have a house (or any real estate property), banking or securities accounts, personal assets, motor vehicles, and you have family like a spouse, children, or anyone else you care enough to benefit from your assets when you die, you need an estate plan because in the eyes of the law, you have an “estate”.

Why do you need an estate Plan?

An estate plan gives you the ability to direct who will receive your assets upon your death rather than intestacy laws or the “reasoned judgment” of a civil Judge dictating the distribution of your estate. Regardless of whether you are a recent college graduate with few assets or a high net worth individual with a multi-million dollar stock portfolio, an estate planning attorney at our firm can help you to get your affairs in order so that a will contests or other estate administration disputes can be avoided in the future.

What are the top 10 benefits of estate planning?

1. Provide for your family immediately: without estate plan in place, your family will get less and it will take them longer to get it. Depending on your assets size and complexity, your family might have to wait 9-18 months to get anything after your death. This means your loved ones will be left in limbo and might end up without enough money to pay bills and other living expenses. It’s not uncommon for families with an unexpected death to nearly fall apart due to the financial strain in the weeks, months, and years to come.
2. The right beneficiaries: Your estate plan will outline exactly where your assets are to go in the event of your death. This leaves no questions to be resolved by the courts or cause for family discord.
3. Ease the burdens of your family: Can you imagine trying to decide when to pull the plug on your spouse who is in a coma or similar condition? Or deciding how his or her remains should be handled? Those are heart breaking decisions that no one should have to face. You can ease this burden by thinking about this kind of thing in advance and planning ahead for it.
4. Minimize the expenses: without an estate plan, a significant portion of your money will go to pay attorney’s fees and court cost. Because the courts are forced to handle everything (process known as probate), the cost can easily exceed 10-20% of all assets depending on its complexity and the time to resolve the distribution of your property, the guardianship of your children, and the destiny of your business.
5. Reduce Taxes: Every single dollar that you pay in taxes is one less dollar that your family will have for paying bills and other expenses. Transfer taxes can be very detrimental if not part of a tax reduction strategy. The key is to start tax planning sooner rather than later — and definitely not to wait until it’s too late.
6. Support your favorite cause: whether you intend to leave just a few hundred dollars or million to charity, that money can help others and make a difference to support your favorite cause. If you are passionate about a local cause or charitable organization, an estate plan can allow you to support them after your passing.
7. Establish trustees over your estate: You’ll need someone to serve as the executor or trustee of your estate to make sure everything is handled properly. Your estate plan will name this impartial person whether physic or legal, which will save money and simplify the administration process.
8. Designate a guardian for your under-aged children: take a minute and ask yourself what would happen to your kids if you and/or your spouse were involved in a major car accident on the way home from work tomorrow? Where were they live? Who will take care of their education? Who will ultimately end up as their guardian? If you don’t have an estate plan in place, you are leaving those hard questions to a court to decide what is the best for your children.
9. Plan for incapacity: Life is unpredictable. If you should ever become mentally or physically incapacitated, an estate plan will outline your wishes regarding life and who will make medical decisions on your behalf.
10. Provide for those you love: Do you want your grandchildren to attend college or university in the future? Or perhaps you have a child who has disability. Through your estate plan, you can set up a special trust (educational trust) to provide funds to support them.

How does the estate planning process work?

All estate planning follows a process of creating a legal strategy plan designed to anticipate and arrange for the care and disposition of your assets at death or permanent incapacitation. Generally, the process involves an attorney creating some legal documents that express your wishes for your assets.

Your estate plan typically includes legal documents, such as:

• Last Will and Testament
• Trusts
• Power of Attorney

In those documents provisions will be included regarding medical decision-making, nomination of guardianship of your minor children and beneficiary designations, among other crucial subjects.

Our proven process in creating your estate plan is designed to provide maximum convenience and efficiency for our clients. For most of them, the process will be identical but should a client have different needs, we will gladly accommodate any request.

Our simple 4-step Estate Planning process includes:

1. Initial meeting – During this free complimentary meeting, our legal advisors will gather basic information about your family, assets, and situation. A good and frank conversation with our clients is the foundation of a good estate plan. From this confidential exchange, we will explain your options, pricing and estimated time for our services. You will gain knowledge of the global framework of estate planning.
2. Engagement of Attorney & Planning Worksheet – After the initial meeting, our legal advisors will send you an email with our financial proposition and our engagement agreement contract. Upon signature of both documents, a 50% down-payment will be required. In addition, you will be sent a digital worksheet for you to complete which provides us the specific details and information we need from you, your family, and all your assets. In many instances, we organize follow up meeting to assist our client in this tedious inventory process.
3. Strategic plan drafting & client review – As soon as you engage us, we will review all legal documents provided via an internal audit process to verify their accuracy and veracity. Once the audit is completed, our legal team will develop a detail planning worksheet with a draft strategic plan. Upon the presentation and review of the proposed legal plan in a one to one meeting, we will send you a first version of your documents within 14 days for your review and approval.
4. Acceptation of plan and execution of documents – Upon acceptation of the final legal strategic plan, the last stage of our process is a series of various administrative tasks and the execution of legal documents. In many instances, Panama laws mandates that various legal documents be executed by witnesses and Public Notary, both of which we provide. We personally accompany you and organize this meeting to effectively execute your documents. Also, we give you guidance on several other important issues (like where to store your legal documents, beneficiary designations, compliance regulation, tax liabilities, accounting matters and reporting, etc.).  At the conclusion of the meeting, you leave with your signed and original documents.

Remember, making plan for the future is a good idea for everyone, no matter how old, young, with or without kids, or wealthy we are.

Estate Planning helps you to gain peace of mind. We are here to help secure the future of your family and its legacy.

Get a free consultation and don’t wait anymore. For any information make an appointment with our legal team free of charge.

Karyne Mora
Head of Legal & Human Resources

For more information:
info@kb-familyoffice.com

October, 2020

Photo by Matt Duncan on Unsplash