If you are new to the concept of estate planning, you can easily get overwhelmed with all the issues. But like the legendary running back, Jim Brown, use to do — you just need to lower your shoulder and plow on through. Start with the basics, says Forbes’ recent article entitled “The Importance Of Estate Planning.”,
An estate plan is a collection of legal documents that do two things – they take care of you during your life and they detail what you want done when you die. The living documents outline how you want to be taken care of if you become disabled or incapacitated and how you want the people you select to handle health and financial decisions. The death documents can cover your funeral wishes and who you want to appoint to carrying them out as well as who you want your assets to go to after you pass. A properly drafted revocable living trust can serve you during life and your family after death.
A comprehensive estate plan written by an experienced estate planning attorney can help you feel more confident about the future because you’ll know your loved ones will be cared for and that the legacy you leave behind is the one you planned. Well thought-out planning now can help decrease any taxes and probate fees and make certain that your loved ones will have less to worry about and less stress when you are gone. However, if you don’t make plans for your estate, it can result in unintended complications for your family. The reality is that if you don’t do an estate plan, the government has one for you, and it’s almost guaranteed that their plan won’t be what you want for you and your family.
Let’s look at some of the essential estate planning documents:
- Will: This is the standard document in your estate plans. Your will designates an executor (or personal representative) to administer the distribution of your assets as you want. In your will, you can also appoint guardians of minor children who will care for them (this can cause some potential problems, so speak to your estate planning attorney about this before you do it).
- Durable Power of Attorney: This document names a trusted family member, friend, or advisor to serve as your agent to act on your behalf in your financial and legal matters.
- Healthcare: It will name a trusted individual to make medical decisions for you when you are unable (Medical Power of Attorney), and permits access to your medical information and medical records (HIPAA Release Form).
- Living Will (Also called the Advanced Medical Directive or Directive to Physicians): This is where you can state your end-of-life care wishes. Living wills can cover pain relief and whether you would want a ventilator, feeding tube or resuscitation
You also need to regularly review and update your estate plan. There may be changes in probate and tax laws, as well as life changes, such as marriage, divorce, or the birth, adoption, or death of a family member that require a revision of your plan. It is recommended that you have an experienced estate planning attorney review your plan every 3 – 5 years.
Reference: Forbes (March 2, 2020) “The Importance Of Estate Planning