Estate planning is the process of organizing one’s financial and personal affairs in order to prepare for eventual death. Depending on one’s current situation, a good estate plan includes several essential documents to guide one’s heirs once an individual has passed on. An estate planning attorney can help you prepare all of the elements of a good estate plan, which include:
Last Will and Testament
Typically, the first step in estate planning is to write out your will. This document indicates your wishes concerning how your property should be distributed when you die. If you have any minor children, this is also your chance to name a guardian for them. A will is an important first step but it is not the only estate planning document you should consider.
Particularly for those with an extensive estate or with minor children, a living trust may be a good option. With a living trust, your assets are transferred to a trust, where they will be managed by an appointed Trustee at the creation of the trust, as well as during your lifetime, if needed (such as if you are incapacitated by illness, accident, or old age). This method allows for faster and easier transfer of ownership of assets while avoiding probate.
Often, you have assets that may not be named in a will or trust. For example, if you have a bank account or retirement account, you can name a beneficiary on the account so that the funds automatically transfer upon death, allowing your family to skip the probate process. You may also be able to add a beneficiary to stocks, bonds, or brokerage accounts.
Durable Power of Attorney
This document can be used to assign rights and responsibilities with respect to your financial affairs while living. This document can also be used as an advance medical directive or designation of health care surrogate, this document determines who will make medical decisions for you if you are incapacitated and/or unable to make them for yourself. You may also want a Living Will, a written set of instructions for your doctor regarding whether you wish to receive life-sustaining procedures if you are terminally ill.
Depending on the circumstances, your business should have a succession plan in place to ensure that your business and related assets are transferred in a manner following your wishes. If you are a co-owner or shareholder, note the business itself may already have a Buy-Sell Agreement or Buyout Agreement laying out your options.
Finally, your estate planning process should include your final wishes. Funeral arrangements can be included in your Last Will And Testament, or in a separate document. Make sure you have planned for the cost of your final arrangements during the estate planning process.