There is a common perception that estate planning only includes a will or a trust in someone’s or some organization’s name. But it is not true at all. There are many features associated with an estate plan. You can definitely do a lot in your estate planning.
Also, remember that estate planning is not only about wealthy people. Estate planning means that you are giving your belonging to another person after your death. Now, this belonging can be anything and it does not have to be a very expensive house or a car. So, keeping in mind that estate planning is for all of us, this article is to give you a brief idea of what are the elements that an estate plan includes.
What Is Estate Planning?
Estate planning is the act of distributing all your belongings to any person or any organization through legal documentation. This is mostly done by people to protect their beneficiaries and their assets as well.
Must Have Contents in Estate Planning!
Here are some of the must-have things in any estate planning:
Wills or Trusts
A will or a trust is a must in any sort of estate planning. Even if you do not have any substantial assets you must have a proper will or a trust where you have distributed your belongings as per your wishes. Sometimes having a trust puts a limit to the estate taxes.
Now, proper documentation is very necessary for a will or a trust. You need to be very careful while distributing your assets to your loved ones. Any small mistake can lead to confusion which might end up in legal contest among your relatives. And this scenario could end up being very messy.
Having A Durable Power of Attorney
Making someone else a power of attorney is very important while you are still alive. If you are found to be mentally incompetent then the court might take your assets and give it to people, who you did not want to. So, to avoid such situations, you need to have someone else who can take decisions on your behalf.
Most people let their better half take the position of power of attorney, just for the sake of convenience. But you can choose anyone in the family who you trust the most.
Your insurance plans and savings account can be passed outside of your will. So, you must choose proper beneficiaries for these accounts. Just in case you do not happen to have any beneficiaries then after your death, the court tends to take such cases. And the decision of court might not be the same as yours. So, it is always better to have beneficiaries registered as soon as possible.
Remember that the beneficiary must be more than 18 years old and they should be mentally competent.
Letter of Intent
A letter of intent is basically a letter that you can leave to your beneficiaries stating what you want them to do with your possessions and belongings. This kind of document is not valid in front of court but definitely, it holds a lot of value to the beneficiary. This letter actually helps in the distribution of your assets and also portray your intentions to everyone in the family.
The healthcare Proxy actually gives another person the power to make healthcare decisions for you. You must be sure that the person with the healthcare power of attorney can be completely trusted and they would make the best decisions for your health on your behalf.
SOME IMPORTANT POINTS!
- Estate planning does not cater to rich people only. It is for everyone!
- You need to have proper documentation while planning your estate or else the probate court can potentially leave all your belongings to some unintended person.
- The estate planning will allow the family member or your attorney to carry out your wishes just in case you become incapacitated while you are alive.
Having an estate planning is really a necessary step so that all our loved ones can be protected after we are gone. This also ensures the well-being of our hard-earned heritage as well. We hope that this article has given you a good idea of the estate planning and what it constitutes. For more information on how estate planning can benefit you and your family please call our office and take advantage of our free consultation offer.