Many people believe that estate planning only concerns older, wealthy individuals. However, we all need to plan for what happens to our assets in the event of our death or situations where we aren't in the position to make decisions for ourselves.
There is a perception that this kind of financial planning is complicated. However, all it requires is taking care of some key things as outlined below.
Here are the basics of estate planning to help you get started.
Draw Up a Will
Drawing up a Will is relatively straightforward. Essentially, this document dictates what happens to your assets after you die.
When you are making your Will, you appoint:
- an executor of your Will
- an alternative executor in case they are unavailable
Your Will should dictate who will receive your assets upon your death. Additionally, it should detail any conditions that must be satisfied before receiving any inheritance. Furthermore, it's essential to name a guardian if you have children.
Many believe their estate will automatically go to their spouse even if they don't make a Will. However, this depends on the individual state, so ensure you get the right advice.
You can set up beneficiary designations for your assets. This process can be done with your bank account, property, real estate, investment portfolio, etc.
This kind of financial planning takes these assets away from the estate, reducing court costs. The benefit is a more simple, direct, and quicker process.
Power of Attorney
A Power of Attorney grants one or more individuals the authority to act as your agent. The authority may be applied generally or restricted to a specific activity, such as concluding the sale of your property. With a valid Power of Attorney, your agent can take any action permitted in the document.
A Power of Attorney applies only when you are living. It is essential that you choose someone you can trust to make decisions for you. For example, it can allow your agent to withdraw from your bank account or sell your assets.
A Living Will is another essential aspect of estate planning. This document will give directions for life-saving procedures that you may or may not want in the event of an accident or illness — for example, a do not resuscitate order.
Choosing someone as your health care agent is crucial. This document allows someone to make decisions about your health on your behalf when you cannot make them. Many people choose their spouse or a child for this role. However, the most important thing is choosing someone you can unconditionally trust.
Make sure you discuss your wishes with your health care agent and provide them with a signed copy of your Living Will.
Take Care of Your Estate Planning Today
Financial planning in the event of death or illness is easy to put off. It's natural to believe that these are things you can take care of in the future. However, life is full of unexpected situations.
It is important for you, your family, and your loved ones that you have an estate plan in place. Contact us today to discuss the process so you can get your estate in order and return to enjoying life without being concerned about what may happen with you, your hard-earned money, and your assets.