Many people avoid the topic of estate planning. However, it is one of the most crucial things that one must navigate about, in detail. It is definitely uncomfortable to discuss the uncertainty of whatever will happen after your death. But if you have even a handful of financial and personal assets that must be distributed after your death, then estate planning is very important.
Specifically, estate planning is essential because it protects beneficiaries, spares heirs from paying hefty estate taxes, and prevents family turmoil associated with the inheritance and other related matters. Hence, you should look into estate planning if you want your family and loved ones to be financially protected after your passing.
However, creating an estate plan can be challenging and complicated. This is why you should familiarize yourself with the fundamentals of estate planning.
Keys of Estate Planning:
There are 4 basic keys of estate planning:
Testament and Last Will:
Every estate plan has a last will and testament, which has a detailed outline of all your assets and to whom you wish to pass them on to, along with your personal wishes. You name people you want to leave your assets for after you die. If you don’t have a will and you die, the assets are distributed through probate.
A will is a significant requirement in obtaining a grant of probate, a form of estate legal document. Probate is the legal process of validating and distributing a deceased person’s assets in accordance with his will. It can be time consuming, depending on the unique circumstances of the testator’s estate.
Seeking legal help is advised so that you don’t have to navigate through this lengthy process alone. Estate planning attorneys are well-versed and trained in the probate process. They are also known as probate lawyers. Hiring an expert estate planning lawyer may assist you if you are uncertain about undertaking the probate process. For instance, you need to obtain a Grant of Probate. It would be best if you work with the professionals, such as those from Will Power Estate Protection or other similar organizations, to ensure that all necessary administration steps are covered.
However, if hiring a lawyer to draft a will can cost you more money, there are other options you might want to consider for your financial situation. For example, many end-of-life specialists are available online to help you with will writing at a reasonable cost. They can provide you with a fast and convenient transaction guaranteeing that experts check the will to ensure its validity.
In addition to the will, other prerequisites for obtaining a grant of probate include the testator’s death certificate, land titles, prenuptial agreements, divorce papers, and any other contracts and documents essential for executing the entire estate. Make sure to obtain these documents beforehand to streamline the probate process and avoid unnecessary delays.
Healthcare Power of Attorney:
Health care advance directives refer to legal documents that outline an individual’s wishes about health care decisions when he becomes incapable of decision-making. On the other hand, healthcare or medical power of attorney pertains to a type of advance directive. It’s also called a health care proxy or durable power of attorney for medical or health care.
Primarily, a healthcare power of attorney can be an attractive option for the following:
- Those with a terminal illness;
- Those who are older;
- Those who suffer from a specific medical condition that makes them incapable of making healthcare decisions;
- Those with dependents who don’t want to make the decisions for them.
If you belong to any of these people, drafting your healthcare power of attorney as early as possible would be helpful. In this, you have to assign a person the permission to make healthcare decisions on your behalf. This usually happens in case of severe illness where a person cannot decide the best for themselves. You can also add your requirements in this document, in regards to the type of healthcare you might want or the hospital/doctor you would like to deal with. You can add as many details as you want to, at your own will. You can also discuss it with your consultant.
It’s essential to be extremely cautious when choosing a healthcare agent. This individual must be able to evaluate and make health care decisions on your behalf with sound clinical judgment. Choose a trustworthy healthcare agent who complies with your state’s healthcare requirements and is not a member of your medical team. This way, you can have peace of mind knowing your healthcare needs are well taken care of on your behalf.
Financial Power of Attorney:
If you meet with an accident or an illness (God Forbid), that doesn’t leave you capable of handling your own financial matters; then this attorney comes into action for you. You have the power to hand over this attorney to the individual of your choice. He/she will manage your financial matters if you are unable to do so. If you don’t have this attorney ready, no individual will be permitted to manage your legal and financial circumstances. This might result in severe loss due to a lack of supervision on your assets.
Hence, create a financial power of attorney document to prepare yourself for unforeseen circumstances as soon as possible. Doing so can also comfort you in knowing that all your financial affairs are handled responsibly.
However, appointing someone under the financial power of attorney to handle your finances can be daunting. Since you’ll be putting your wealth in the hands of another person, you must choose someone you trust and believe can take care of your financial security properly. This way, you’ll be more confident with your decision
Establishment of a Trust:
Establishing trust means to tag an entity that can possess your assets while you live or after your death, depending on your wish. They will be in control, based on your wishes. Setting up a trust can be beneficial in various ways. For instance, you can avoid the probate process by making the agreement private. When you have a trust, you only need to work with an attorney and the trustee for the agreement, saving more money in the long run. Moreover, you can keep your money within the family through a trust. It can benefit your children and grandchildren as long as your heirs keep the assets in the trust.
Thus, outline everything in detail, in this document. For instance, through a trust, you are able to state how you wish for your child to gain benefits from your assets. You can also add details about certain ways through which assets must be utilized. As mentioned, the establishment of trust has a lot of benefits but it is not a mandatory element of estate planning. Thus, you can make a decision for yourself.
Is estate planning necessary?
Yes, it is. You don’t want to leave your assets that you have earned through endless efforts, to go to waste. They must be taken care of, by the people you love or you think deserve them. Thus, invest time and effort in estate planning before it is late.