Estate planning is the process of deciding how your assets will be distributed after you pass away. It does not have to be a long, costly, or depressing process. Many people think only the very wealthy need to worry about estate planning, but the fact is that everyone benefits from having their affairs in order.
After a person passes away, their assets are distributed through a will or trust. The document will determine the distribution of assets.
A Will, also called a Last Will and Testament, is mainly used to transfer property to your beneficiaries. In this document, you can also specify any last wishes and name guardians for your minor children. It is an integral part of any estate plan. Without a will, the court will decide who gets your property and custody of your children.
A Living Trust is like a will in that it is used to distribute property to your beneficiaries. The main benefit of a trust is that you can transfer property out of your name over time and avoid probate court. If you do not have a living trust, your will is administered by the probate court, which can take a long time, be expensive, and require the assistance of an attorney. A well-written trust may also reduce the amount of taxes your estate will have to pay.
If you become incapacitated and can no longer make decisions for yourself, the court must appoint a guardian to make decisions about your personal affairs and a conservator to make decisions about your property. These Guardianship and Conservatorship proceedings are time consuming, expensive, and will require the assistance of one or more attorneys. You can avoid this process by deciding beforehand who will take on these responsibilities.
A Living Will is a document that you use to specify your wishes while you are still alive relating to your wellbeing if you become incapacitated. For example, one issue that would be included in a living will is whether or not you wish to remain on life support.
Having a quality estate plan is the only way to make sure your property goes to the right person and your children are cared for by someone you trust. If your estate plan is not properly prepared, it is possible that the court will reject it and the court will decide what happens to your property.
Estate planning matters include:
- Living Wills
- Durable power of attorney
- Medical directive
- Nominate guardians