Wade discusses Estate Planning in Delaware..
Good morning everyone this is Wade Scott. I’m with the Delaware Elder Law Center. Today we’re going talk about the estate planning process.
There’re two approaches to estate planning. One approach is the Will based approach and that’s what we most often think about. So, a will is a document that applies to probate property. Probate property is property that a person owns in their individual name and that account does not have a beneficiary designation. That’s probate property. And when a person dies the will is the document that applies to probate property and determines who gets that property when the time comes. Probate is a process that is administered through the court system. The part of the court that is involved is the Register of Wills; and so, there’s official rules and regulations that have to be followed. In Delaware, it takes approximately a year to complete probate. There’s a 1.75 percent probate fee and there’s attorney fees that average somewhere around $7,000 and the process works. It takes place in public and that says people can go down to the Register of Wills and find out the assets that you had; the debts that you had; when you died. It’s a stressful job! I’ve never met – worked with a happy executor, but it’s a process that works.
Now, there’s an alternative and that alternative is known as the Revocable Trust based estate plan. The reason the trust arrangement avoids probate is that the trustee owns the assets in an official capacity; a status known as trustee. They don’t own individually that’s why it works. The trust is revocable because the client is in complete control of the assets, has full ownership, and can change the terms of the trust in the trust arrangement whenever he or she wants to; that’s why it’s revocable.
Regardless of the approach there’s other documents that are part of the estate plan that are critical. There’re three documents that address times of disability; that’s why I call them the disability documents. They are the general durable power of attorney, that’s the financial power; it gives your agent authority to make financial decisions, business decisions for you. A really critical document is the advanced health care directive that allows your agent to make healthcare decisions for you if you can’t make them for yourself. Then there’s the HIPAA release that allows your agent to get health care information and talk to the doctor. So, all those documents together, the will, perhaps it’s a revocable trust, then the durable power of attorney, advanced health care directive, and the HIPAA release, together, that’s known as the foundational estate plan.
And so that’s just a short introduction to estate planning. I hope you found it helpful. Please check back with us. We have more videos just like this. Thanks.