You are young and you are ready to change the world! But as you charge into the world, there’s something you maybe were never taught…
The importance of taking steps to secure your current and future assets and estate through an appropriate estate plan.
Last Will and Testament
A fully fleshed out estate plan consists of guardianship plans, and beneficiary documentation, and tons of other things. But the first thing people usually think about is drafting a last Will and Testament.
In brief, a Will describes your wishes in regards to assets and estate after you pass. This includes decisions such as who gets to inherit what (in regards to your estate), who will manage your wealth if it’s necessary, and even who should be named as the guardian of your children (if required). There are a number of other documents and ways to do this, but as we said before, the last Will and Testament is often the first thing people think about and set up during their exploration of estate planning.
One of the biggest drawbacks to simply relying on a Will is that to enforce the details in the Will requires a court process known as probate. Wherein a judge will determine how to interpret the desires of the will, in regards to metering out your estate. Plus, probate is costly and time-consuming. However, going through probate to disburse your estate according to your wishes is infinitely better than having a judge make an educated guess (their own opinion) on how to distribute your estate and assets. Which is what they’ll do, without an up to date Will.
Hopefully, you have a long time to think about how your will needs to be worded and updated. However, choosing not to establish one in the first place, is risky, and could ultimately be very costly for your family and heirs. You can get ahead on this, by talking to an estate planning attorney today.
Living Will
Health and wealth are two very important aspects of estate planning. And in planning for your future and potential catastrophic personal events, safeguarding them should never be overlooked.
A living will defines your intent and desires for potential end-of-life care. Do you want to be on life support? If so, how long? How much of your estate and assets should go to support your end of life care?
You might utilize your living will to state advanced directives too. For instance, you might state that in certain cases, pain killers should be used, but CPR or other extreme measures should not be attempted to sustain your life.
Living wills often work in conjunction with Healthcare Power of Attorney (Medical Power of Attorney), or Durable Power of Attorney. You should familiarize yourself with these documents if you’re going to set up a Living Will. Still, if you’re getting the bases covered, you should work with an Estate Planning attorney to set up your Living Will.
Financial Power of Attorney
A financial power of attorney designates someone to take charge of your financial assets and affairs in your absence or in case you’re incapacitated. This may be part of a larger set of Powers of Attorney or may be specifically designated to only cover financial issues of your choosing. The responsibilities of your financial POA might include taking care of and protecting your assets, distributing your assets, or even something as straight forward as dealing with your bills.
In addition to working with a great Estate Planning attorney to set up your Financial Power of Attorney, you may also want to engage the services of a financial planner. Working with a financial planner that understands estate planning will enable you to have a better understanding of the types of financial issues you FPOA designee would have to deal with.
Living Trust
Trusts play a pivotal role in planning for the future of your estate and how it will be taken care of when you pass or become unable to manage it. One of the greatest advantages of a living trust is avoiding probate which is the court process and associated fees that we described in the section above (Last Will & Testament). One huge bonus of a living trust is that unlike a Will, it is a whole lot easier for you to update it throughout your lifetime. So, easier to update, protects your wealth from disappearing into taxes and probate, and you can set it up relatively easily with the help of a great Estate Planning Attorney. It’s a win-win-win, for someone new to estate planning. Here’s more information on living trusts.
Contact us today to schedule a consultation.