We often get questions about what goes into estate planning. Most people have heard of a Last Will and Testament, often just called a “Will,” and they may have heard something about trusts, but beyond that, they find the whole topic overwhelming and something they’d rather put off. Unfortunately, when this important planning is postponed or ignored, you set up your family for headaches, costs, delays, and even infighting that all can all be avoided.
When you plan properly for the future, you make a difficult time easier for your family and let them move on with their lives with your help to smooth the way. A qualified and experienced estate planner can help lead you through this process to best achieve your goals for the future of your family and loved ones.
So what goes into an effective estate plan?
The details of each component of your plan can be worked out with your estate planning attorney who will get to know you and your situation, and has the expertise to help you design a plan that best meets your goals. The basic components they will work through with you are:
- Last Will and Testament
- Powers of Attorney
- Health Care Directives
- Beneficiary Designations
There may be situations where you will need more than one trust or power of attorney, but these are the basic steps in creating an effective plan for the future.
Last Will and Testament
The Last Will and Testament, often just called a “Will,” is what most people think of when they consider an estate plan. This is a formal document which spells out clearly who you want to be able to control and use your assets after you die. The Will can be very specific regarding certain items you want to go to specific persons, or it can be more overarching referring to “personal items” or the division of a pool of assets. You can also make provision for the care of minor children, disabled family members, pets, or disbursements to charities and other organizations.
Having a Will is a very important step in your estate planning, but it is not the only step.
Setting up a Trust can protect your family and loved ones from what can be excessive estate taxes, help direct the manner of use of your assets, set individuals in place to oversee and assist in the proper use of your assets, and provide for young children, grandchildren, disabled individuals, and pets. There are many different types of trusts, and your estate planning attorney can help you choose what best fits your needs.
Powers of Attorney
Decisions that plan for your future do not just deal with after-death issues. Planning for the future includes planning for your own protection and care should you become incapacitated. Various Powers of Attorney allow you to specify who will be able to act in your place regarding financial, legal, and medical decisions that must be made regarding your assets and your person. A financial Power of Attorney lets someone step in to pay your bills, manage your various accounts, and otherwise act as you would if you were not incapacitated. A Health Care Power of Attorney sets out who can step in to make medical decisions on your behalf regarding your medical care when you are not able to express your wishes yourself.
It is very important to have these Powers of Attorney set in place well ahead of when they are needed. Your attorney can help explain the implications of your choices for Power of Attorney.
Health Care Directives/Living Wills
This document sets out what you want done in a medical situation should you be unable to speak for yourself. This document can be placed in your medical record and also given to the person named as your Health Care Power of Attorney to make clear what medical interventions and treatments you do or do not want should you become incapacitated.
Your beneficiary designation extends past your Will and Trusts to include insurance policies, retirement accounts, and other assets. These payouts can be set up to go directly to individuals, paid into a Trust for the benefit of those you specify, or, in some cases, can be paid to charities of your choice. The choice of beneficiaries and the methods and timing of distributions should be discussed with your estate attorney in order to design the best plan for you.
How Do I Get Started?
Designing your estate plan is an important step that should not be put off or left to chance. Let us assist in the process of setting up the best plan you. Talk to the experts at Siedentopf Law for help in planning for the future for you and your family.