What Is Estate Planning?
If you’d like to sort out your financial affairs and protect your loved ones when you’re no longer around, consider estate planning.
Estate planning involves controlling, preserving, and distributing an individual’s assets. It may also be used to take charge of the assets and finances of an incapacitated individual.
If you’d like your estate to be distributed a certain way, or you’d like to ensure the guardianship of your minor children, you might need to develop an estate plan with the help of an estate attorney.
What Are My Options Under Estate Planning?
There are several options available if you wish to plan your estate. Depending on your needs, you can use one or a combination of several. Some of these options are highlighted as follows:
A will is a legal document that indicates your last wishes concerning the distribution of your property when you die. With a will, you can appoint an executor to carry out your wishes in your absence. You can also appoint a guardian for your minor children.
A will helps you to take charge of your legacy. With the help of an attorney, you can learn about the specific laws and estate planning strategies to help you make a valid will and preserve your legacy.
A trust is a legal concept/document that provides for the interim transfer of assets from their owner (trustor) to a trustee for the use and benefit of the named beneficiaries.
The trust document sets out the established rules to govern the administration of the trust. These rules help the trustee manage the assets and distribute them to one or other beneficiaries.
When deciding whether to put your assets/ properties under trust, you could consider either of these types of trusts:
The revocable trust: This type of trust enables you to retain power over the assets and money and can change the terms anytime.
The irrevocable trust: This is a more permanent type of trust, and you cannot change the terms of the trust without the beneficiary’s approval. However, it has some merit since it is not subject to estate taxes. An irrevocable trust can also help to protect your assets from creditors.
Power of Attorney
A power of attorney is a document appointing a person to step in and manage your finances and assets if you are ill, incapacitated, or physically unable to do so.
You can limit or give full control powers to the person you appoint by the terms contained in the document. A limited power of attorney is restricted, while an unqualified power of attorney gives your representative complete discretion on how to act.
A beneficiary designation is a written statement giving directions as to who would receive your benefits from life insurance policies, bank accounts, and retirement accounts benefits.
An annual maintenance plan with your lawyer may be essential to periodically review your designated beneficiaries and update the list if necessary.
Medical or Health Care Directive
A medical care directive is similar to a health care power of attorney. It gives an individual the right to decide on your behalf on the measures to be taken when you are ill or incapacitated and unable to communicate your wishes.
If you’d like more information on how to set up a medical directive, contact a skilled elder law professional. They can answer your questions and ensure your desires are fulfilled.