Estate Planning Basics
This guide generally explains the purpose of various estate planning documents.
What is an Estate?Your estate is everything that you own. This includes life insurance, joint properties, and real estate.
What is an Estate Plan?An Estate Plan consists of documents that address issues such as:
1. who is in charge of your affairs during life and after death;
2. who receives your assets after your death; and
3. who will care for your minor children if you pass away.
What are typical estate planning documents?Typical Estate Planning documents often include the following:
1. Powers of Attorney for health and finances;
4. Medical Releases (HIPAA release for current access to medical information);
5. Appointment of Guardians; and
Why are Powers of Attorney the most important documents?Financial Powers of Attorney are vital because the document grants another person the power to act on your behalf while you are alive, to do whatever you could do with your assets and affairs. It may be effective upon your disability or as soon as you sign it. It appoints an "Agent" or "Attorney-in-fact."
Without a Financial Power of Attorney, if you cannot manage your affairs, your family may have to petition Probate Court to appoint a conservator to manage your assets.
Health Care Powers of Attorney are important because this document grants another the power to make medical treatment decisions and life support decisions when you are no longer able to make your own health decisions. It appoints a Patient Advocate. This document is sometimes called a Patient Advocate Designation, Five Wishes, or Advance Directive.
Without a Health Care Power of Attorney, if you cannot make your own decisions, your family may have to petition Probate Court to appoint a guardian over you.
Why do you need a Will?A will is a written document that directs the disposition of assets held solely in your name, with no beneficiary designation, after your death. A will should also appoint a person, called a Personal Representative, to be in charge of carrying out your wishes.
1. It can nominate a guardian for minor children.
2. It does not avoid probate.
3. It can be a guide to your family if probate is not required.
Via a will, you can name a guardian for your minor child. The guardian would raise your minor child if you died.
What can you do?Keep records of your assets, tax returns, and important documents so you and your trusted legal representatives can find the information. Give a trusted person your passwords if you access your accounts on-line.
Be cautious about adding names on accounts and designating your beneficiaries:
1. Joint owners typically get to keep the joint asset regardless of what your Will or Trust states.
2. The same is true for named beneficiaries of assets like life insurance.
3. The joint owner or beneficiary receives the asset after death and is not obligated to pay for your funeral, pay your expenses, or share it with family.
Call us. We can assist your through this process.