What are Estate Planning Documents?
You want to make sure the assets you’ve worked a lifetime to collect go to the people or organizations you care about, and that your designated beneficiaries and powers of attorney are clear and concisely chosen. Estate planning can be an intricate process when it comes down to the paperwork and finer details, but it is possible to make it easier with the aid of competent, experienced professionals.
What are the Benefits of Having an Estate Plan?
- Providing for Your Family
- Preserving Assets for your Posterity
- Ensuring Your Assets Are Distributed Properly
- Minimizing Estate Taxes and Fees
- Appointing a Trustworthy Advocate for Yourself In the Event of Your Incapacity
- Charitable Giving
These goals, and so many more, can be accomplished through the proper planning, wording, and filing of an estate plan. It benefits not only yourself, but your loved ones and future generations.
Estate Planning Documents
Wills and Trusts
Wills and trusts are two of the main facets that should be included in every estate plan, regardless of what assets you possess. Wills and trusts ensure your assets and property are distributed according to your wishes. Not having a will or trust subjugates your assets to be distributed by the state in a manner the state deems fit.
Designating a guardian if you have children or are considering having children in the future is often overlooked when creating an estate plan. Picking a guardian who shares your views, is financially capable, and is willing to raise children could ensure your children are well looked after in the case of your incapacitation or death. Make sure to elect a guardian and a backup guardian to avoid having your children raised by undesirable family members or, in extreme cases, mandated to the state.
Healthcare Power of Attorney
Healthcare Powers of Attorney (HCPA) are designated individuals that make healthcare decisions should you become incapacitated. Typically, this is a trustworthy person (spouse or family member) who understands and shares your views. They would likely respond to the situation in a way that mirrors your own desires. Another agent should be selected in case your initial agent is unable or unavailable.
Durable Powers of Attorney
Durable Powers of Attorney (POA) are instructions for an agent or assigned person to act on your behalf in the event you become incapacitated. Without a Power of Attorney, the court will appoint who can make decisions about distributing your property, regardless of your wishes or intentions.
This document gives your agent the ability to enter into contracts, make financial transactions, or other legal decisions on your part as if they were you. Any POA can be revoked if the principal is competent. All POAs terminate upon the principal’s death.
Beneficiaries and contingent beneficiaries are the people who will receive your funds upon your death. Selecting and keeping them up to date on your wishes is vital to an estate plan’s success. In the event a beneficiary is deceased or unable to serve, your funds could be left for a judge to distribute. There are minimum age and health requirements for named beneficiaries that, if not met, could end up with your funds at the fate of the court.
Letter of Intent
Letters of intent are documents left to an executor or beneficiary defining specific requests concerning an asset after your death or incapacitation. This document may not be valid by law, but it helps the judge understand your intentions and distribute your assets should your will fall through.