As the New Year progresses, there is no better time to start thinking about estate planning. To start your year off right, here is a checklist of the five must-have pieces to every solid estate plan.
This is the most obvious starting point of every estate plan – and, in fact, most people who have done some form of estate planning probably do have a will in place. Basically, a will is a legal document that provides a directive for how your property, finances, possessions, etc. will be divvied up after your death. A will also allows you to appoint a legal guardian for minor children, as well as appoint someone as “executor” – which will allow them to carry out your wishes as stated in the will. Yet, where property is concerned, a will only includes probate property, and there are many other types of property that may need additional attention depending on your circumstances.
2. Power of Attorney
Debatably the second most important part of any estate plan after a will, a power of attorney lets you appoint someone to make financial decisions for you if you become unable to do so. Without a power of attorney in place, the court will be left to appoint a conservator – and this process will cost money, but more importantly, it may leave you with someone you would not have chosen making important decisions regarding your finances.
3. Beneficiary Designations
Designating beneficiaries for your retirement plan may not be part of your official estate plan, but it is an important step to tying up loose ends and can be easily done while working on the rest of your estate plan. Without naming beneficiaries, your benefits will be out of your control after your death, and this misstep could leave your loved ones with less financial security than they may have otherwise received had the simple step been taken. While many plans will automatically distribute to a surviving spouse or children, the only way to fully assure that your wishes are carried out is to solidify your beneficiary designations.
4. Medical Directives
Medical directives are vital to making sure your medical wishes are carried out if you are incapacitated or not of the mind to make these decisions. The directive may include multiple parts, including a power of attorney, a health care proxy, and a living will. Your health care proxy and power of attorney should be someone you trust to make medical decisions on your behalf if you are unable to do so. The living will expresses your wishes in regards to life support – whether you would like it sustained or withdrawn, should that decision need to be made. This is an important document on two fronts – first, it maintains that your wishes be carried out the way you would see fit, and second, it removes this emotional burden from loved ones faced with making a decision for you, without expressly knowing your preferences.
Setting up a trust can allow individuals to control the distribution of their assets while they are alive and also after their death. Trusts can have many uses, providing for surviving loved ones, providing for a family over generations or benefiting a charitable organization. Trusts can also have advantageous tax benefits for beneficiaries, protecting property and avoiding probate. A revocable living trust will terminate upon ones death, and the property will pass to beneficiaries, which can be a convenient way to save time and money.
So, if you are thinking about estate planning in the New Year, contact the experienced estate planning attorneys at Fields and Dennis. We can help with all of your estate planning needs, from a simple will to an encompassing estate plan that includes all of the must-haves listed above. If you are not sure which documents are important for your individual concerns, we can help you formulate a unique plan to suit your needs. With another year behind us, there is no time like the New Year to make an estate planning resolution.