Estate Planning: What to know before you create a Will

Your legacy deserves meticulous planning—find out how to do it right.
Person signing documents

Created in partnership with Kroger Gardis & Regas.

Life is short.

Is it too soon to say that when discussing estates and what you need for a will?

Nevertheless, life is short, and the lives we are living are so full. We’re pursuing our passions, building lives with people we love and admire, and continuing to grow our assets, businesses, and families of (blood relation and our chosen people). When the time comes—though it’s not fun to think about—how can we best prepare so that those we love don’t have to play rock, paper, scissors over directives?

Melissa McCarty, a partner at Kroger, Gardis & Regas, LLP, shared the 411 on estate planning and what to know before creating a will. 

First and foremost, what is a will? Why is it important? 

A will is a legal document that directs a named person (the “personal representative”) what you want to have happen to your property and your dependents after you die. The property a person owns upon their death is an estate, and the will communicates the intended distribution of your estate to the people, trusts, and charities you have chosen. Melissa also notes that “Confusingly, the administration of an estate (also referred to as ‘probate’) is the legal process by which a court supervises the distribution of an estate.”

This can feel like a lot as you start tallying up all that you own, especially if you haven’t had to catalog it before. However, if you don’t make certain decisions before your time, it might also be out of the hands of those that you would like to see be on the receiving end. If you die without a valid will (referred to as “intestate”), Indiana law will decide (a) who gets your property; (b) who administers your estate; and (c) if you don’t have a spouse, who will be the guardian of your kids younger than 18 years old at the time of your death. Many times the statute makes choices that you would not have. Melissa says this can range from “providing only $25,000 to your current spouse if you do not have kids together, and providing nothing to a long-term partner.”

The first steps

Knowing the consequences of not taking time to build a will can be a motivator to get on it – but there are a few things to get in order before you meet with a lawyer to move the process forward. First, identify all of your individually owned property (this includes real estate, accounts, household goods, sentimental belongings, and collections). “Write it down in a way that makes sense to you,” encourages Melissa. Next, you will need to identify who you want to be your personal representative, your attorney-in-fact, and your healthcare representative. Melissa continues, “Keep in mind what your designated representatives are good at and what they are not – naming your brother as your personal representative when he routinely loses his car keys may be ill-advised. Similarly, your empathetic best friend might not be capable of making healthcare decisions for you in a crisis…I recommend having two backups for each role in case the original person cannot serve for any reason.” Once you have these folks chosen, be sure to list each person with their mailing address, email address, and phone number.

Time to make some decisions 

Alright, so we have our ducks in a row, and we’re ready to start thinking about what we want when we are gone. Depending on your familial status, business commitments, and other life standings, there are different considerations to be had.

If you are someone without kids, Melissa says, “The most important thing is to think about who you want to be in charge of your estate – most commonly, a sibling, parents, spouse/partner, friend, or a lawyer/accountant familiar with your situation.” Thinking of your property (everything we listed out in preparation for meeting with our lawyer), how do you want to leave your property? It can be given to individuals, charities, or nonprofit organizations you want to support. Melissa dives further sharing: “If the value of all your individually owned property on the date of your death in Indiana is $100,000 or less after deducting payments to secured creditors and reasonable funeral expenses, your estate does not need to be administered. In that case, your property can be transferred via affidavit. One way to do this is to name beneficiaries on the title to your real estate and car (‘transfer on death’), and on your retirement accounts, bank, and investment accounts (‘payable on death’). This both simplifies the transfer of property and reduces the amount counted as part of your estate. Remember that jointly owned property is treated differently, so it’s important to know whose name is on the titles.

Secondary issues to consider are whether you want a court to closely monitor the personal representative (referred to as a ‘supervised administration’) or not (an ‘unsupervised administration’); and whether you want to require them to post a bond (in case they mess up or improperly distribute your things).

Tell them what you want

In addition to a plan for your stuff, you also need to plan for yourself. A power of attorney identifies who you trust to handle your financial affairs if you cannot (your ‘attorney-in-fact’), and a health care advance directive identifies who you trust to make medical decisions for you if you are incapacitated (your ‘health care representative’).

If you have kids or dependents, your primary goal may not only be to those selected individuals you want sentimental belongings to go to or organizations you want to support, but rather to make certain your dependents/kids are provided for – both by a caretaker and with funds. Not only do you need to take into the considerations we just walked through, but you will need to decide who will be best suited to raise your kids if you are not around to do so (also referred to as a “guardian”).

Melissa specifies, “If you are married or in a long-term relationship, the guardian identified in your will is most often your spouse or partner. If you are not, the guardian might be a sibling, parent, cousin, or friend.” As you name the guardian, you must also ensure they can access the funds provided to care for your kids. This can be accomplished by including a trust provision in your will – this will protect its use and keep money set aside for the care of your kid(s).

While a will should be prioritized for everyone, it must be top-of-mind for business owners (especially those of closely held entities without detailed entity documents). “If your company has an operating agreement (for a limited liability company), or bylaws (for a corporation), those documents may address the disposition or continuation of your business after your death,” shares Melissa.

It’s a process 

Keep in mind that estate planning is not a one-time task. As your life continues on its journey, seasons change, and chapters start (or close), your will must also adapt. Melissa recommends reviewing your will and other estate planning documents at least every two years.

To determine the best way for you to plan your estate, find a qualified attorney. There is not an easy roadmap when it comes to estate planning because everyone’s life paths are different and unique – and your will is going to reflect that. Work with a trusted lawyer to help guide you through the myriad of questions that may arise as you begin this process. To get started you can contact the Indiana State Bar Association or the Indianapolis Bar Association. As you build a life you are excited to live, build your team to carry on your legacies.

Arianna Cruz is an Indy Maven contributor. 

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