Creating an estate plan involves some research on your part. While it is the job of an estate planning attorney to draft an estate plan for you, it is also crucial that you do some research on your own. What is estate planning? What are the fundamentals of estate planning? As we progress, we’ll provide you with answers to these questions.
First off, let us consider what estate planning is:
What is estate planning?
Estate planning is the process of indicating how you want your estate to be handles after your death or if you are incapacitated and unable to handle things on your own. The most common estate planning definition is “the process of making plans for the management and transfer of your estate after your death, using a will, trust, insurance policies and/ or other devices. “ Estate planning has been around for several years, but is becoming very common.
There are several parts of Estate planning, But the first thing you need to do is carry out a thorough review of your estate assets. Your estate consist of all the property you own, including:
- Cash
- Cars
- Savings
- Clothes
- Jewelry
- Investments
- Retirement accounts
- Land
- Etc
Fundamentals of Estate Planning
1. Health Care power of attorney
A health care power of attorney is an important estate planning document that allows you to choose an individual (agent or attorney-in-fact) who will make those important health care decisions on your behalf when you are unable to do so.
If you fail to set up a heath care power of attorney and you become incapacitated along the way, the court will choose an individual who will make those important health care decisions on your behalf. The individual is often someone close to you.
2. Durable Power of Attorney
A durable power of attorney is another crucial estate planning document. Like a health care power of attorney, this legal document allows you to select an individual who will make essential financial and legal decisions on your behalf when you are unable to.
Also, if you fail to set up a durable power of attorney and you become incapacitated along the way, the court will choose an individual who will make those important financial and legal decisions on your behalf. The individual is often someone close to you.
3. Letter of Intent
A letter of intent is used to convey instructions, request, including crucial personal or financial information that isn’t in your will. It is also used to specify how you want certain things to be done. For instance, you may decide to indicate how you want to be buried in your letter of intent. Worthy to note is that, you don’t need the help of an attorney to draft this document as it is not legally binding like a will.
4. Last Will
No doubt, a will is one of the most important estate planning documents. It determine who gets your assets after your death. This document also consist of the names of your estate beneficiaries, including the assets you want to transfer to each of the beneficiaries.
The importance of a will is numerous. Aside from those mentioned above, a will can also help you designate guardians for your minor children (If you have any). In addition, with a will, you can select your personal representative also known as an estate executor or executrix.
5. Living Trust
A trust is another important estate planning document. This legal document allows you to take assets you own and place them into the ownership of a trust you set up while alive. The trust is the owner of your assets and managed them while you are alive. Upon your death, the trustee (the individual you select to manage the trust) shares the assets placed in the trust to the designated beneficiaries.
6. Guardianship
If you have minors, designating a guardian will be a necessary component of your estate plan. A guardian who will have the legal responsibility to cater to your children. This individual will cater to them personally and financially until they become adults.
Need the help of an estate planning attorney?
If you need the help of an estate planning attorney, don’t hesitate to contact us. Our estate planning attorneys have what it takes to create an estate plan that suits your needs and that of your beneficiaries.