How Can an Estate Plan Help
How can an estate plan help? I’ve heard a lot about estate plans and that I should have an estate plan, but how does that actually help?
And an estate plan essentially covers both the things that we know will eventually happen and the unexpected.
Imagine that you are in a car accident, and now you’re in the hospital. Who is paying your bills? Who is making your medical decisions? Do they know the correct medical decisions? Who is taking care of your child? Who is taking care of your pets? Of course, it is a bad situation. You are in the hospital, but is everything taken care of during that time? You just have to worry about healing or is, you know, the mortgage not getting paid and everything else sort of crumbly.
Often we think of estate planning and a will as synonymous. A will is a document that was filed with the probate court after you have passed away that says who is in charge and who gets your stuff. It also names a guardian for your child if you’ve passed away. But you know, essentially who’s getting your stuff after you’re gone.
An estate plan often includes a will because that is important, particularly if you do have a minor child. But we’re talking about trusts, which can deal with your assets during your lifetime if you’re incapacitated and after you’ve passed away, to make sure that the beneficiaries get the things they’re supposed to at the time that they’re supposed to, and that the right person is in charge and that we didn’t have to go to court for any of this.
We have power of attorney that’s legal and financial decisions for you if you cannot make them for yourself or if you want it to start right away, it can be simultaneous. Advanced directive for healthcare. It’s essentially a medical power of attorney. Who out of my family should be making my medical decisions and then which medical decisions do I want made?
And designation of standby guardian is if you have a minor child and there’s an emergency need for a guardian during your lifetime, you’re not gone. So the will has not kicked in, but we do need somebody in place to avoid, you know, any child protective services needing to step in.
So the idea of an estate plan is that we have decided what we want to happen in each of these situations and set up the correct documentation to make sure that it actually does happen.
An estate plan usually involves multiple documents because all of these things hit different, different situations, give different powers and you know, often we’re trying to do things like, you know, take care of you in case you’re incapacitated. Take care of your children in case you’re incapacitated and in case you’ve passed away, you know, minimize estate taxes, perhaps avoid probate, you know, not need to go to court for any of this.
And an estate plan is a holistic multiple document plan, for lack of a better term, that says, you know, how should all of these things plug together and actually work? So that is how an estate plan can help.
And each estate plan looks different. It depends on your situation, your family, and what you own. So an estate plan, you know, could be relatively simple or it could be quite complex with, you know, many, many moving parts. And that’s why it’s important to talk to an attorney about exactly what you need for your specific goals and situations. If you’d like to talk about this, I would love to hear from you.
