Everyone has an estate plan. Even if you don’t have any documents in place, you have an estate plan. Unfortunately, without any estate plan documents, the distribution of your estate will be determined by the courts, according to your state’s laws of intestacy. Instead, you may want to consider some of the many legal strategies involved in estate planning, including wills, revocable living trusts, irrevocable trusts, durable powers of attorney, and health care documents. A properly drafted estate plan will replace the State’s estate plan with your own.
Every estate, regardless of size, is an important one. And each person or family has values, goals, needs, and objectives that are unique. We do not presume to know what is best for you before meeting with you, spending time getting to know you, and listening to you. But we do know that most people want to ensure that their estate plan will take care of the family not only now, but also during every phase of life, including death. A good estate plan includes several documents that are important in implementing your plan, but documents alone are not the complete solution. The way assets are titled and how beneficiaries are named is also critical to taking care of the family when you are no longer around.
Last Will and Testament – Your last will and testament is just one part of a comprehensive estate plan. Some things you should know about wills:
A will is a “death” document. As long as you are alive, it has no legal authority. Therefore, it cannot help with managing your affairs during incapacity.
A will does not help avoid probate. It is the legal document submitted to the probate court, enabling the court to handle the distribution of your assets.
A will is good for naming the guardians (or back-up parents) of your minor children if they are orphaned.
Trusts – There are multiple types of Trusts designed to serve a variety of purposes. They can be simple or complex, revocable or irrevocable. But they all allow you to pass your assets in a manner you choose based on specific instructions – your “rule book” – privately and without court intervention. A living trust is often the base estate planning document used to accomplish your wishes. However, the key to the success of this document is making sure your assets are properly aligned with the trust. Instructions in your trust can also allow any asset earmarked for a beneficiary to be protected from divorces, bankruptcy, and lawsuits. There may be many advantages to establishing a trust such as avoiding probate, providing for the trust-maker during incapacity, protecting assets, or supporting a favorite charity.
Power of Attorney – a power of attorney is a legal document giving another person or organization (the agent or attorney-in-fact) the legal right (powers) to act in your behalf. What those powers are depends on the terms of the document.
Health Care Documents – a Healthcare Power of Attorney (or healthcare proxy) is a legal document giving another person (the healthcare agent) the legal right (powers) to make healthcare decisions for you if you are unable to make and communicate your own wishes. These powers are described in the document. A Living Will specifies the type of medical and personal care you would want should you lose the ability to make and communicate your own decisions. It also provides instructions regarding the circumstances under which you would not like your life to be prolonged such as being in a coma with no hope of recovery. A HIPAA Authorization gives authorization to your medical providers to allow specified individuals to access your medical information.
When planning for minor children, there are more things to consider than just naming a guardian. Instructions on how the assets inherited by the child should be used need to be included in the estate plan. And when planning for children getting ready for college, you should consider powers of attorney for them.
Then when planning for your grown children who are married and may have children of their own, you need to think about the potential for divorce and remarriage. Blended families have their own unique needs that should be addressed.
And don't forget about taking care of your furry or feathered friends. Pet trusts can be part of your estate plan so that pets who outlive you are cared for when you are no longer there for them.