Estate planning is an essential mechanism for ensuring that your financial legacy is distributed according to your wishes, which allows you to continue supporting the ones you love and to address additional concerns, such as guardianship of any minor children. While it may seem daunting, setting up a comprehensive estate plan doesn’t have to be as complicated as you may think. The peace of mind that comes from knowing you’ve taken care of this critical task can prove invaluable
A reputable online estate planning company that allows you to create and securely store your estate planning documents can help at an affordable rate.
Your will lays out exactly how you want your assets to be distributed upon your death. While some wills are elaborate, others are very straightforward – depending upon the size and nature of the estate and the wishes of the person. If you pass without creating a legally binding will, your estate, which refers to any assets that aren’t in a trust, will be distributed among your relatives by the laws of intestacy in your state.
When you create your will, you’ll assign an executor who will oversee the distribution of your assets when the time comes. While you can address your financial assets with other estate planning tools, you’ll need the will to address the guardianship of any minor children – in the unlikely event, both you and their other parents die before they reach adulthood.
There are also financial matters that wills cannot control, including:
Wills are implemented through the state’s probate process, which is a court matter.
When you assign power of attorney (POA) to an individual, you authorize them to handle your financial decision-making if you are unable to do so. A POA can be set up to go into effect only in response to your incapacitation, or it can be set up as a matter of convenience, such as when you are out of town, and documents need to be signed or business needs to be taken care of.
The person to whom you assign the role of POA only has the authority to make the exact kinds of decisions and to engage in the exact kinds of transactions that you specify. A financial POA grants only financial authority, which does not extend to making medical decisions on your behalf, and this authority remains in effect only during your lifetime.
To address your wishes as they relate to end-of-life care or healthcare decisions that need to be made due to your incapacitation, you’ll need an advance care directive. If you have specific preferences, this is your opportunity to outline them for whoever will be making decisions on your behalf.
This estate planning tool is often called a living will. Depending upon the state you live in, you may be able to assign a healthcare power of attorney to make the necessary decisions on your behalf within this document. When this isn’t the case, however, filing a separate healthcare power of attorney is necessary.
A living trust can address many of the same financial concerns a will can – while streamlining the process. A living trust is a tool that allows you to put specific assets that belong to you into the ownership of a belief that you create during your lifetime. In the process, you assign a trustee – whose job it is to manage how the included assets will be distributed according to your wishes upon your incapacitation or death.
Your living trust is a private matter, which means it won’t need to go through the probate court process – unless there are disputes among the named beneficiaries or presumed heirs. Having a valid living trust in place can save your loved ones both time and money – at a time when they are also facing considerable grief and stress.
As mentioned, only a will can address the matter of your minor children’s guardianship – a living trust cannot serve this purpose. Further, because you may come to own assets that you don’t include in your living trust – often due to time constraints – having a will in place to address these items is always a good idea.
For example, if you win the lottery or come to own other valuable assets before death and don’t have time to update your living trust accordingly, the distribution of these assets will need to be resolved according to the laws of intestacy, which tends to be legally challenging, time-consuming, and costly.
Often, the wills that are created in addition to living trusts are called pour-over wills because they take care of anything that isn’t included in the trust.
At TrustHandled, we recognize how important taking care of your estate planning needs is for your peace of mind, and we’re here to help. Our goal is to help you better understand the process and help you access the estate planning tools you need – without all the complications, confusion, and costly expense.
Estate planning affords the opportunity to effectively and efficiently distribute everything you’ve worked so hard for in this life to those who are most important to you. Too many people put off estate planning because they find it intimidating. Still, TrustHandled is committed to shifting this mindset by offering an online template for estate planning documents, clear instructions, and secure online storage that ensures the estate planning tools you create are ready to be accessed when they need to be.