When will estate planning become an essential part of your life? The answer to that question is when you start thinking about who will care for the people and things you love once you are gone.
Estate planning is a topic that most people will avoid talking about. The thought of preparing for the future and what will happen to your family if you die can be overwhelming, but it doesn’t have to be.
Estate planning will help manage how much income tax will be paid on your assets, where they will go when you die and who will take care of any minor children. This article discusses the top 5 must-haves for Will estate planning.
Let’s take a look at these essentials.
Wills and Trusts
A will or a trust might appear complex and costly; however, it is a completely mistaken assumption. Even though you may not have a lot of money, a will or trust may be one of the most critical parts of your estate planning. Wills guarantee that property is dispersed following a person’s intentions.
At the same time, trusts can assist you to avoid paying estate taxes or dealing with legal issues. Owning a will or a trust, though, would not be enough. The document’s phrasing is quite significant.
- Beneficial Abbreviations
Since they may go outside of a will, insurance policies should include a recipient and a potential beneficiary. In case you do not identify a beneficiary, or even if the beneficiary fails to serve or is deceased, the future of your estate might well be decided by the law. And, to be honest, a judge who is uninformed of your position, views, or purpose is unlikely to reach the same conclusion as you.
- Long Term Power of Attorney
It’s critical to write a long term power of attorney (POA) so that a person or an agent you choose can move on your part if you can not. However, If you don’t have a power of attorney, the law will have to decide your assets if you’re declared mentally unfit, and the court’s judgment is not what you desire. The estate planning firm will be able to help you write a will or draft the necessary documents for your POA.
Letter of Intent
A letter of intent is a written document that you might leave to your executor and otherwise beneficiary. The goal is to specify what you wish to happen to a specific asset once you expire or become incapacitated. A letter of intent may include information about burial arrangements or other unique wishes.
Although the document is not legal, it helps in informing a probate court of your objectives and may aid in the allocation of your belongings if your will is found to be defective for whatever cause.
If you have small children or are thinking of having children, choosing a guardian is crucial and often disregarded. Ensure that the person you pick matches your values, is financially stable, and is interested in starting a family. A backup or dependent guardian must be specified, too, though, as with other designations.
Healthcare Power of Attorney
A crucial way to protect yourself and your family is preparing a healthcare power of attorney. This will allow you to choose who will make medical decisions on your behalf should you become incapacitated or incompetent due to illness, injury, or some other reason. Your choice will be legally binding, so this person must know what they will need to do, be responsible for communicating with your doctors, and access the resources they will likely need.
The Bottom Line
Estate planning services entail more than just selecting how to divide your possessions once you pass away. It’s also about ensuring that your family and other recipients are looked for and have accessibility to your assets if you become incapacitated temporarily or permanently. The will is a perfect way to begin, but that’s just the start.