Having a solid estate plan in place is the only way to make sure your assets are distributed as you wish, and funeral plans are covered.
If you pass away and do not have an estate plan, there will be no direction for how your assets will be distributed. Without that, your family may have to deal with probate court, which quickly eats away at the assets you want them to have. The court may also not distribute your assets the way you want.
In short, a successful estate plan will include provisions allowing your family members to access or control your assets, should you become unable to do so yourself or if you pass away. To make sure you have all your bases covered, your estate plan should have the following:
A will and/or trust — A will or trust should be one of the main components of every estate plan, even if you don't have substantial assets.
A will can help you make sure that your assets and property are distributed as you wish. A trust, on the other hand, helps limit estate taxes or legal challenges. But just having a will or trust is not sufficient. You'll need to make sure the wording is correct and complies with state laws.
Tip: Consider appointing a guardian and a backup guardian for your underage children in your will. If you do not name a guardian, the courts may decide to place your young children with a family member of the court's choosing. Worse yet, they could be put in state custody, which means a foster home.
Durable power of attorney — A durable power of attorney form gives another person the capability to make decisions regarding medical care at the end of life for the person who signs the form. If the person dies, the durable power of attorney also has the power to act on behalf of the deceased for financial reasons.
This document can give the designee the power to transact real estate, enter into financial transactions, and make other legal decisions on your behalf.
Beneficiary designations — This applies to any life insurance or retirement accounts you own. A beneficiary designation is the act of naming the person or persons who will inherit an asset in the event of the account owner's passing.
Some common examples include life insurance policies and retirement accounts. When the account owner passes away, their assets are then transferred to the beneficiary that they designated.
It's also possible to designate your estate as the beneficiary. Instead of transferring the asset to a person, the asset is transferred to the estate. Then, the asset is distributed according to the provisions in your trust or will.
Letter of intent — A letter of intent is not a legal document. It is a letter to loved ones or an executor of a will. It acts as a message from the deceased and can include an array of information, including how you want issues handled, like funeral arrangements, pet care, who gets which of your personal belongings, and more.
While such a document may not be valid in the eyes of the law, it helps inform a probate judge of your intentions and may help in the distribution of your assets if the will is deemed invalid for some reason.
Health care power of attorney — This document designates another person (usually a spouse or family member) to make important health care decisions on your behalf in the event of incapacity.
Give us a call if you would like to discuss this more in detail.