Why Is It Important to Have an Estate Plan?
No one ever knows for sure when they might become incapacitated or pass away, so it’s wise to begin estate planning as soon as possible. Estate plans don’t only take care of your loved ones when you’re gone—some documents also let you make decisions about your care if you are unable to take care of yourself. Additionally, the legal process of probate is public, costly, and can be lengthy. An estate plan can help you minimize probate or avoid it altogether, allowing loved ones time and space to grieve.
If you die without even a will, referred to as “intestate,” the court decides how, when, and what of your assets are distributed. Furthermore, through the laws of intestate succession, the court decides who benefits from your estate. Ultimately, estate plans help you avoid these downfalls and help you craft your desired legacy.
What Documents Might be Part of an Estate Plan?
There are a variety of legal documents you can execute as part of an estate plan. Whether you utilize one or utilize them all depends largely on your wishes, who you want to benefit from your estate, and the types of assets you have. Here are four key types of documents:
- Wills can express your wishes regarding how your debts are satisfied and who receives your remaining assets. A will also allows you to name a guardian for a minor child. You also name an executor in the will whose task is to oversee the administration of your estate throughout the probate process.
- Trusts, unlike wills, are not subject to probate. That makes them good tools to use if you want to avoid probate. With living trusts, you transfer ownership of your assets to the trust where they are managed while you are alive for the benefit of the beneficiaries you name in the trust. A testamentary trust, on the other hand, is created through your will which makes it subject to probate.
- Powers of attorney allow you to name those you want to manage your financial and personal affairs should you be unable to during your lifetime. These are revocable at any time, and they only grant authority under specific circumstances.
- Advance healthcare directives are tools that allow you to decide what types of lifesaving measures and end-of-life medical treatment you want. One advance directive is a living will, not to be confused with a will that deals with your assets after death. Another directive is a durable power of attorney for healthcare in which you can name the person you want to make medical decisions for you should you be unable to do so for yourself.
How Can an Estate Planning Attorney Help?
There are many types of fill-in-the-blank estate planning documents available online. Rather than reaching for these, work with an estate planning attorney instead.
Your attorney will educate you about the range of estate planning tools available and help you identify the right solutions for your specific needs. Most people who don’t work with estate planning cannot know which documents they should execute, what assets and issues they should address, and how to make sure every document is consistent with every other document. Furthermore, your attorney will ensure that the estate planning documents you execute are legally enforceable. Having a document ruled invalid means your estate will be handled as though you never executed anything. Finally, an attorney can provide trust administration or help the trustee you name administer a trust as prescribed, as well as help ensure proper administration and confront any challenges that might arise along the way.