Creating an estate plan is a sure-fire way of ensuring that your wishes are followed in the event of your incapacitation or death. The idea of an estate plan is to tie up all loose ends in your financial affairs so that your dependents’ peace of mind is well taken care of after you are gone. Learn more now 4 important estate planning documents you should be aware of.
Your estate is the sum of what you own, including your investments, bank accounts, real estate, cars and collectibles. After your death, all your property is supposed to be distributed according to your wishes. That’s where an estate plan comes in.
Estate planning is designating who will receive and manage your estate when you die or handle your responsibilities after your incapacitation. Basically, it’s making how you’d want your estate to be handled known. To help you with that, we’ll cover four important estate planning documents you should know about when creating your estate plan.
Are Estate Plans Only for The Very Wealthy?
While estate plans were previously regarded as something for high-net-worth individuals, everyone can do an estate plan today. Your financial status notwithstanding, you can do estate planning.
To create an estate plan, you’ll need four types of estate documents. Let’s break the documents down:
A will is a legal document that expresses your last wishes regarding property distribution after your death. After you’re gone, a will ensures that the people and causes you care about are taken care of.
When drawing up your will, you specify who gets to inherit your physical and intangible assets. Besides allowing you to lay out who you want to give your assets to, you can choose an executor to oversee and carry out the wishes in your will. If you have children or pets, you can appoint guardians for them in your will.
This legal document dictates how assets in a trust are to be distributed. The parties in a living trust are; a grantor, a trustee and a beneficiary.
A revocable living trust owns the assets you’ve put into it while still allowing you to make changes. The trust allows you to retain the use and control of any assets you’ve transferred into the trust during your lifetime.
To establish a revocable living trust, you’ll name a successor trustee and then transfer your property to the trust. The successor trustee will manage the trust for your beneficiaries, do the necessary estate tax filings and finally transfer assets to your beneficiaries according to the terms of the trust. If you’re looking to avoid the lengthy and costly probate process, a revocable living trust is a good option for you.
A power of attorney is a legal document that gives another person (your agent) the power to act on your behalf when you’re not able to do so yourself.
A power of attorney document grants your agent the power to act on your behalf in financial, legal and medical decisions when you can’t make decisions for yourself or in the event of death. Financial and medical powers of attorney are two different legal documents.
A healthcare power of attorney is your proxy for healthcare matters. This document specifies who is to make medical decisions for you if you’re incapacitated and can no longer make decisions for yourself. Be sure to include a privacy consent form that gives the person access to your medical records to enable them to make informed decisions.
The document designates a financial agent that will execute financial decisions on your behalf should you become incapacitated. A financial power of attorney gives out legal authority to a nominee to manage property and finances, manage investment and meet financial obligations on your behalf.
An advanced healthcare directive document allows you to determine your future medical care and make requests regarding your end-of-life care.
A medical directive lets you outline the care you wish to receive if you’re diagnosed with a terminal condition and cannot make decisions yourself. The document states what medical actions, treatments and life-saving measures should or shouldn’t be taken when you’re incapacitated and can’t advocate for yourself.
To kick start the process of creating an estate plan, you’ll need to gather the following documents for a smooth process:
Working with an experienced estate planning attorney will tie up all loose ends in your financial affairs and safeguard your hard-earned assets and investments, so you don’t have to worry about the financial security of your beneficiaries.
Are you looking forward to launching your estate planning in Florida? The Law Offices of Andrew G. Rosenberg, P.A. exists to help you go through the process seamlessly and leave a solid legacy for your beneficiaries.