Estate Law comes with a lot of questions. While we can’t answer all of them on a single webpage, this article does address some of the biggest question marks that might be hovering over your own decision about whether to file as an individual (and how to do so).
Remember: every situation is different. Because of the uniqueness of your circumstances there is really no substitute for directly speaking with an experienced lawyer.
What Is Estate Law, and What Is An Estate?
Estate law is the body of law that concerns a person’s physical and personal property. Estate law involves planning for a person’s finances and property both during their lifetime and after. It’s a body of law that includes taking care of people and property. It can involve both transactional law and litigation. Estate law is all of the laws that impact how a person makes decisions and issues directives about their personal affairs.
An estate is anything that makes up a person’s net worth. To determine a person’s estate, you add up their assets and deduct their debts. Real property like land can be part of a person’s estate. Personal property like household items and vehicles can also be part of an estate as well as bank accounts and other financial instruments. If a person owns property in common with others, their share of the property may be part of their estate depending on how they share the property with others. To put it simply, an estate is what a person has to their name.
What Kind of Estate Law Is There?
There are several different types of law that make up estate law. These types of law often intertwine. Estate law may involve any of the following types of law:
Wills
A will is a document that states what a person wants to happen to their property when they die. Each person has the right to decide who to give their property to when they pass away. They must deduct their debts from the value of their estate before they can total up their remaining assets to give to the people they choose. The state law where the person lives says what the rules are for creating a will.
When a person dies without a will it’s called dying intestate. Each state has rules for what happens when a person dies without a will. An estate lawyer may help their client handle the estate or contest the distribution of an estate when a person dies without estate planning.
Trust
A trust is a legal instrument that allows someone to hold property that someone else owns for the other person’s benefit. A client might use a trust in order to minimize estate taxes and minimize the hassles that can go along with estate distribution. In other cases, a trust is helpful to manage assets for a minor or a person with disabilities. Attorneys help their clients determine if a trust is the right vehicle for them to reach their estate planning goals.
Powers of attorney and advance directives
Powers of attorney and advance directives give guidance on what a person wants to happen in the event that they’re unable to care for themselves. A power of attorney allows a client to give someone else the right to make decisions for them and manage their finances if they’re unable to express their own wishes. Many people use advance directives in order to advise if they want life-saving efforts like hydration and CPR if they face severe medical difficulties.
Guardianships
When a person is unable to manage their own affairs because of a physical or mental disability, they may need a guardianship. Adults need a guardianship when they’re unable to handle their own affairs. Children need guardianships when their parents are unable to care for them. Through a guardianship petition, a court can give another person the legal power to make binding decisions for someone else.
Estate Law Is Both Transactional and Litigation.
Attorneys who practice estate law may practice transactional law as well as litigation. When estate lawyers prepare documents and help clients plan for the future, they’re transactional lawyers. There are no court appearances involved in making a will or preparing a trust, for example. If there’s a will contest, an estate lawyer is a litigator. An estate attorney may attend court and present evidence at a contested hearing. Nearly all estate lawyers practice transactional law, but most are also prepared for when they need to be litigators in order to represent the best interests of their clients.
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Estate Law is Both Proactive and Reactive
Some practice of law is simply reactive. For example, a criminal defense lawyer helps a client react when they’re facing a criminal charge. Likewise, most civil litigation cases involve a dispute over something that’s already occurred. Attorneys sometimes help their clients react to something that’s already occurred. Other times, attorneys help their clients plan for the future. For example, they help their clients create a contract or they advise their clients on what behavior complies with the law and avoids civil penalties.
Estate law is both proactive and reactive. Estate lawyers help clients prepare documents that spell out exactly what’s going to happen in the future. The hope is that with advance planning, the client can have their wishes carried out as smoothly as possible. On the other hand, estate law is reactive in that estate attorneys help their clients with estate administration and will contests.
Estate Law is Primarily State Law
Most estate law is state law. State laws determine what needs to be in a will in order to make it valid. There are federal estate taxes that may apply to an estate. Clients with multi-million dollar estates must be careful to structure their estates in a way that contemplates federal estate taxes. To properly serve clients, an attorney must know what state and federal laws apply to their client’s situation. Attorneys must also be mindful that when a client moves to a new state, they may need to update their estate planning in order to continue to have the desired effect from their estate planning.