After spending a lifetime accumulating assets and working to provide for your family, it is important that you plan on how best to leave your estate to your loved ones. Through proper planning, you can have your estate pass exactly as you would desire rather than having the government dictated how your estate should be divided.
But first, it is important to plan for potential illness and incapacity. By executing solid Advanced Directives, you can ensure that your wishes will be truly followed. Two important Advanced Directives that deal with medical decisions, are a Health Care Surrogate and a Living Will.
Health Care Surrogate
The Health Care Surrogate will enable you to appoint a loved one to make medical decisions were you unable to speak on your own behalf. It is important to consider naming a backup surrogate in case your primary surrogate is unreachable or unable to act for some reason.
The Living Will specifically states what circumstances you do not desire for doctors to artificially prolong your life if you have are in a terminal, vegetative, or end of life condition. This document has taken on even more importance ever since the Terry Schiavo court case.
Durable Power of Attorney
It is also important to have a customized Durable Power of Attorney so that someone can manage your finances and daily needs in case you are unable to handle your personal affairs. You will want to choose your Agent, the person who you are giving authority to act on your behalf, wisely as a Power of Attorney in the hands of the wrong person can be a license to steal. In the hands of the right person, it can be an essential document that helps preserver your estate and eliminate the need for a guardianship.
Not all Powers of Attorney are the same. You will want to make sure that you have the right one for you.
Now that you have planned for illness and incapacity, it is time to evaluate what is the best vehicle to distribute assets to your loved ones upon your passing. For many people, executing a Last Will & Testament and/or a Revocable Living Trust is that vehicle of choice.
Last Will & Testament
At the very least, everyone should have a Last Will & Testament that details how you would like your assets to be distributed upon your passing as well as who should be managing your estate’s affairs. For people with minor children, a Last Will & Testament is a way to name guardians to take care of your children.
Revocable Living Trust
Many people do not realize that simply having a Last Will & Testament does not avoid probate. For those that want to avoid probate, a Revocable Living Trust is often the vehicle of choice. This type of Trust can act like a Last Will & Testament in the sense that it enables your assets to be properly distributed to your chosen beneficiaries. However, when properly funded, the Trust can allow your estate to avoid the unnecessary delays and costs associated with probate.
Some additional reasons one might want to consider executing a Revocable Living Trust:
- Incapacity planning and concerns;
- Special needs planning for loved ones;
- Desiring to leave monies to grandchildren in a certain manner and at specific ages;
- Wanting to leave assets to beneficiaries that are in troubled marriages;
- Wanting to leave assets to loved ones that have creditor issues or are being sued; and
- Having beneficiaries that may not get along with each other.
Have More Questions About Estate Planning?
Learn more about common questions we receive from clients about estate planning on the page below!