“I don’t need an estate plan, because I don’t have an estate.”
We’ve heard that a lot. But contrary to popular misconception, you don’t have to own a big house with lots of land to have an estate. Your “estate” consists of everything you own when you die, including your home, personal property, investments, bank accounts, retirement plans and any interests in a family business or partnership. While beneficiary designation control who gets retirement accounts and life insurance proceeds, for most other assets, you need a will or living trust that specifies who gets your stuff. That’s where an Estate Planning Lawyer can help.
If you die without a will or living trust (“intestate”), state law will determine how most of your belongings are distributed, and the result may not be what you would want.
You’ve got the Power
You have the power to choose, to plan, to decide who gets your stuff, when they get your stuff, who can make decisions for you if you are unable to so. Why would you leave it up to chance?
The purpose of estate planning is to determine what happens to your assets when you die. One way or another, any property you own at the time of your death must go to someone else. And you have the right to determine who that someone will be.
Your estate plan should include:
A Power of Attorney (POA),
sometimes called a durable power of attorney is a document in which you authorize another person to act on your behalf. You are called the “Principal” and the person you is are called your “Agent.” You can give very broad or only limited powers to your agent, depending on your wishes and your specific situation.
Learn more about Powers of Attorney here.
Advance Directives for Health Care
In your advance directive for health care you appoint you rhealth care representative (the person who will make medical decisions if you are unable to do so), and you state your wishes about end-of-life decisions (a “Living Will”), and you state your wishes about organ donation and finally you designate your choice of a conservator in case one is necessary or requested.
Learn more about Advance Medical Directives here
Will or Last Will and Testament
Your Will is a legal document in which you direct how and to whom your property, both real and personal, will be distributed after your death. In your Will, you name a personal representative (often referred to as an Executor) who will be responsible for handling the administration of your estate in accordance with your stated wishes. If you have minor children, your will is where you appoint legal guardians and/or trustees for any of your children who are minors at the time of your death. The legal guardian is the person you chose to be responsible for the raising of your children and the trustee will be responsible for the management and distribution of the estate assets you have left to your minor children.
Learn more about Wills here.
Revocable Living Trust (optional)
A Revocable Living Trust or a Family Trust is a legal document that holds legal title or ownership to your property and assets. When you create a Revocable Living Trust you transfer ownership of your assets to your trust. When you transfer assets into the trust it is called “funding” the trust. When you transfer title you do not lose any control. You can still buy, sell, borrow or transfer any of your property.
To many a living trust is very similar to a will. It includes the details and instructions for how you want your estate to be handled at your death.
Learn more about Trusts here.