Estate planning does not only involve what happens to your assets when you die, but also includes instructions and appointments of agents to handle all of your financial and medical matters when your unable to do so for your-self. Do not assume your loved ones know what you want put it down in writing in order to get rid of any ambiguity and arguments by and between your loved ones regarding your wishes.
What Is an Estate?
In the simplest terms, an estate is everything you own—money and assets, including your home and your car—at the time of your death. When you decide, in advance and in writing, who will get your assets and money, that’s estate planning. Your heirs are the people who will receive your money and assets after you’re gone. The act of giving these things to your heirs is called asset distribution. Your debts are also part of your estate—funeral expenses and anything you owe must be paid off first by your estate before any further money or assets are distributed to your heirs.
Estate planning is not entirely about money. It may also leave instructions for how your incapacitation or death may be handled. For instance, you may not want to be kept on a life-support system if you were in a coma. You may want to be cremated instead of buried. These instructions can be included in your estate planning.
Having an Estate Plan
Many people struggle with the idea of where to start, or simply do not think they need to have a plan. The simple fact is that estate planning will be different depending on your life stage. Here is a rough idea of what you might want to explore based on your life stage (don’t worry if you are not familiar with the documents listed, we will explain those later):
- Are you single without any dependents? You may want to explore a durable power of attorney, letter of instruction, and defining beneficiary designations on your accounts including Transfer on Death (TOD) Beneficiaries.
- Are you married without any dependents? You may want to explore a durable power of attorney, letter of instruction, living will, healthcare power of attorney, and defining beneficiary designations.
- Do you have dependents? You may want to explore a durable power of attorney, letter of instruction, living will, healthcare power of attorney, will, and defining beneficiary designations.
Estate Planning Documents
The Estate Planning Documents consist of the following:
- Last Will and Testament;
- General Power of Attorney;
- Durable Power of Attorney for Health Care; and
- Living Will;
Some of these documents require witnesses, signatures notarized, or both. Please call for a free consultation regarding an Estate plan best for your situation and time of life.