What are the Basics of an Estate Plan?
Maybe you’ve had a recent life event: marriage, divorce, birth, medical diagnosis, or death of a loved one, and it has you thinking about the future. You’re wondering what might happen to your family and all your assets after you die and what are the basics of an estate plan. You’ve come to the right place.
What are the basics of an estate plan?
First things first: You Need an Estate Plan
If you have any assets or debts at all, if you own or owe anything– you have an estate. So, you need an estate plan.
Now that we’ve got that out of the way, let’s talk basics. What are the basic items everyone should have in their estate plan?
Last Will and Testament
A Last Will and Testament (or Will) is a legal document that outlines your wishes for what happens to your estate after you die. This document names an executor to carry out the wishes outlined in the Will. The Will also names beneficiaries to receive assets and personal effects. A Will can also include guardianship language for minor children and pets. Some people choose to put language about the disposition of their remains (what happens to their body after they die) or wishes for their memorial service.
The Will is the document that the Court uses to administer your estate. So, it’s very important it is valid. Georgia requires that a Will be signed by two witnesses not named in the Will.
Click here to learn more about Wills.
Power of Attorney
A Power of Attorney document is a legal document where you name an individual or individuals as your agent. This means this person can act on your behalf to make financial decisions, sign legal documents as your agent (such as contracts, etc), and act on your behalf.
This document acts differently than a Will in that this document is only valid during your lifetime.
You can choose that this document becomes active immediately upon signing, or you can choose that the document’s effect be “springing”. This means a triggering event causes the document to become effective. Typically, incapacity is the springing event that would cause the document to become effective.
Click here to learn more about what a Power of Attorney allows you to do.
Advanced Healthcare Directive
The Advanced Healthcare Directive, also known as a Medical Power of Attorney, documents is much like the Power of Attorney document named above. This document also names an agent (healthcare agent) to act on your behalf. Where this document differs is that this document is only for medical purposes. The person named in this document is given agency to make decisions for your medical care in the event that you are unable to do so for yourself.
This document also incorporates your Living Will. This portion of the document addresses your preferences for end-of-life care– outlining the decisions you are making for yourself as it pertains to many different areas of care. Some of these areas involve receiving or withholding artificial nutrition, CPR in a comatose state, and other end-of-life care.
Having these choices in black and white as a part of your Advanced Healthcare Directive removes pressure from your family and healthcare agent, as you’ve already clearly outlined your wishes for these difficult situations.
Watch this video to learn more about the differences between an Advanced Directive for Healthcare and a Power of Attorney.
Click here to learn more about the differences between a Last Will and Testament and a Living Will.
Trusts
Many people assume that a Trust is only for the extra rich. But that just isn’t true! A Trust is another basic piece of the estate planning puzzle. While a bit more complicated than a Will, Trusts are still a vital tool in managing your assets for now and further down the line. One of the major pros of using a Trust in your estate plan is that the Trust becomes active at the time of signing the document—meaning you have a tool that you can use while alive to manage your estate with ease.
A Trust, much like a Will, outlines your wishes for how your estate is dispersed upon your death. You name a trustee to oversee the Trust during your lifetime and after your death. This person implements your wishes as outlined in the Trust.
One of the greatest benefits of a Trust is privacy. It is not filed in Court, so it does not become public record. And when properly implemented, your estate will not have to go through probate—saving your estate money in probate costs.
Learn more about the different kinds of Trusts here.
Things to Consider for Your Estate Plan
These are the very basics of an estate plan. Estate planning is not a one-size-fits-all situation. Every individual and family is both unique and complex. So is your estate plan. You may think your estate is basic. But chances are it is not. Chances are your estate is robust and may need more consideration than you realize. More than just the basics should be considered. This is a good thing!
We’re here to help! The professionals at Siedentopf Law are here to help you determine whether you should execute just a Will, if you should create a Trust, or if other estate planning tools should be implemented for you and your family.
To schedule a consultation to discuss your estate planning needs visit our website or call us at 404-736-6066.
