Many consider estate planning a chore of the “elderly” and “wealthy.” However, estate planning accomplishes much more than asset distribution, probate avoidance, and tax planning. An estate plan is the set of instructions given to those you trust to make decisions for you during periods of disability and to distribute your property after death. Estate planning presents itself in the most basic forms of the distribution-guiding documents (wills and trusts), healthcare directives, and financial powers of attorney.
- What is a will? A will appoints a personal representative and directs her to distribute your property after your death. A will can also designate a guardian and conservator for your minor and/or adult children in the event one is needed.
- What is a revocable living trust? A revocable living trust is a legal entity all its own which “holds” property and is managed by a trustee (you) for your benefit during life. After death, your successor trustee (whom you name) distributes your property according to your instructions. You can craft your trust to meet your precise distribution desires, often as complex as you wish. A trust can provide for you (and your loved ones) if you become disabled. It can also direct your successor trustee to financially provide for your minor children’s needs until they become adults.
- What are healthcare directives? Healthcare directives (also called “living wills”) appoint an individual to make end of life healthcare decisions when you cannot, and further guide that individual’s decisions to meet your wishes. These provide for religious wishes, family or other matters, life support and treatment wishes, and more.
- What are financial powers of attorney? Financial powers of attorney allow you to name someone to act on your behalf regarding your property and finances. Powers of attorney can be immediate (granting power to your agent immediately) or springing (becoming effective only after you become incapacitated).
Whether 20 or 90 years old, you have loved ones (children, spouse, dependent parents, friends, etc.) and assets (house, household belongings, business interests, bank accounts, retirement and investment accounts, cars, etc.) which you currently care for and manage. But who will take care of you and your property if you become disabled or after your death? Without a formal estate plan, you leave your loved ones with many difficult and personal choices. By creating an estate plan, you provide for your loved ones after you are gone, someone is already appointed to enforce your healthcare and financial wishes when you cannot, and clear instructions require a personal representative or trustee to distribute your hard-earned assets where you wish.
Death is uncomfortable to plan for; but failing to plan may leave your family in a tough situation. Protect your wishes, family, and assets by contacting Hirst Applegate, LLP to prepare an estate plan.