Estate Planning Essentials
Congratulations! You've worked hard. You finished school, found your significant other, had children , purchased a home(s), and acquired that nice car, coin collection or piece of jewelry you always wanted. But now you're curious, " who gets what," after my passing?
Your Will - Who gets what?When a prospective client consults me and asks, "who gets what after I die?" I inform him/ her that depends on how you want property disbursed and who will disperse it. A will is a legally binding document that provides a person whom you trust, usually your spouse, parent, dear friend, to carry out your distribution wishes provided by the will. This person or entity is known as the personal representative (PR). Some prospective clients, especially men, are concerned of personal items they've acquired that they "really want to make sure" a specific person or entity acquires, usually due to its sentimental value. In this instance, a specific bequeath of tangible personal property, including any applicable insurance policy attached to it, is used and provided within the will. If you have minor children, a will can appoint a guardian for them to handle their affairs until they reach adulthood. When a person passes without a will, this is known in the law as dying " intestate," and the laws of intestate succession, which are rather clear, will apply.
Living Will / Health Care Directive.The living will / health care directive is an important document that documents your wishes should you become incapacitated and clearly indicates if you do or don't want to be kept alive artificially. Remember the Terri Schiavo case from Florida? That case is a good example of a situation where a living will indicating her desires to be kept alive artificially or not most likely could of prevented the case it became.
What else goes in an estate plan?If you 're married, I usually recommend a community property agreement along with the other documents discussed. A community property agreement is a contract between husband and wife that provides any property acquired during your marriage automatically transfers to your surviving spouse at death, without the necessity of probating the property contained within the agreement. A community property agreement can also convert any separate property, ( property acquired prior to marriage) to community property, should one so desire. A will for a spouse is still necessary however to determine how the surviving spouse wants the property distributed on her death. A durable power of attorney is also recommended in most cases. A durable power of attorney appoints a person, known as the attorney- in-fact, to handle your affairs should you become disabled. Please keep in mind that the estate itself, is a separate entity. When a personal representative setups an estate, a bank account is setup with its own account number and own Tax ID number. The estate has the power to sue and be sued. Creditors, such as credit card companies, and other outfits where the deceased owed money to can make a claim against the estate for monies owed.
This is tough to talk about!I know it is. Just thinking and talking about how you want your property and assets distributed assumes your death. But, it's just something you just have to do. You've worked hard for the assets you've acquired and you want to make sure that the people or entities you love and care for acquire your property and assets after your passing. Preparing an estate plan is actually being responsible about your affairs and doing the best you can in taking care of your family and loved ones.