Most people are familiar with the need to create a will, but less are aware of the forward thinking of a comprehensive estate plan. An estate plan includes a will and various other considerations for all of the facets of your life. After all, your life is much more than just your assets. Your healthcare, minor children, real estate and more need to be accounted for should you become temporarily or permanently incapacitated.
Below is a list of items that should be included in a comprehensive estate plan. An estate planning lawyer can help you draft your plan and will be sure you consider all important aspects of your estate.
A Will, also known as a Last Will and Testament is a document which divides up your property. Requirements for wills vary from state to state, but in order for your will to hold up in court, the best practice is to execute, or sign, the will in front of two witnesses and have them sign it as well. Wills that are drafted without witnesses are known as holographic wills and are easily challenged in court settings upon your passing.
A trust is a legal document that lets you put conditions on how your assets are distributed before and after your death. Although these assets are named in your will, a trust can help keep your beneficiaries and your property out of probate court. Trusts are often used to avoid estate taxes and probate costs. To set up a trust you need the following:
- The Trustor: The person who creates and funds the trust
- A Trustee: The person overseeing the management and distribution of the trust assets
- Property: Items to disperse
- Beneficiaries: The person or persons who will benefit from the trust.
- Durable Power of Attorney
A durable power of attorney (POA) designates a person of your choosing to act on your behalf should you become unable. Spouses often set up reciprocal powers of attorney, while some choose other family members or trusted advisors with more financial savvy. This person can act as your agent to make real estate and other financial decisions.
Healthcare Power of Attorney
Designating a healthcare power of attorney means someone will be able to make healthcare decisions for you in the event of your incapacity. It’s a good idea to choose someone you trust and who shares your views. This person is likely to have life sustaining/ending choices in their hands so discussing your wishes with them is important while you are still of sound mind and body.
There are a number of possessions and funds which pass to your beneficiaries outside of your will. Life insurance policies and retirement accounts are examples of assets that require their own beneficiary designations. It is important to make sure your beneficiaries designations are up to date so that they are consistent with the rest of your estate plan.
If you have minor children or are thinking of having children, you will want to make specific designations for the care of them should you be unable. Some wills provide for this, but not all. When you determine the potential guardians for your minor children, they should be financially able, share your beliefs and be genuinely interested in raising children. It is a good idea to make financial considerations in concert with guardianship designations so that adequate resources are available for the care of your children.
Finally, you may want to leave a Letter of Intent. This is simply a document left to the executor of your estate. It is rarely considered a legal document, but if you’ve carefully chosen the executor of your estate, they will likely follow your wishes. This is where you would state the wishes for your remains and funeral arrangements.
You’ve spent your life building your estate, it makes sense to spend some time planning for it once you’re gone. The tips above are a great place to begin to understand everything you need to consider as you think about drafting your estate plan.
The estate planning lawyers at The Law Offices of Young Wooldridge, LLP can inform you of legal options you may not know you have. If you need help planning or settling an estate, contact The Estate Planning Lawyer Department at The Law Offices of Young Wooldridge, LLP.