It’s not too early to start preparing for the future of yourself and your loved ones. The first step you will need to take is to evaluate your situation and then develop a strategy that helps meet your needs. When you create your estate plan, consider the following factors:
A Will describes how your assets will be divided and distributed at your death. This document also names the persons who will manage your estate at your death. It is important to note that a Will governs the disposition of assets held in your individual name only. It does not govern assets held as “joint tenants” or those that designate a beneficiary. However, a Will can help ensure that your individually owned assets transfer at your death as you intended.
Revocable Living Trust
Often you can use a Will in conjunction with a Living Trust. You can create this trust during your lifetime for your own benefit. At your death, the trust will distribute your assets in the same way a will does, but without the high degree of court involvement. You may want to consider establishing a Living Trust if you want to:
- Avoid probate
- Create long-term trusts for your heirs
- Protect assets should you become incapacitated or eventually need help managing your financial affairs
Assets that designate a beneficiary, such as life insurance policies or retirement assets, will pass automatically at your death to the designated beneficiary, regardless of your Will or Living Trust. As a result, take time to review these designations to help make sure they are consistent with your overall estate plan and personal goals.
Durable Power Of Attorney
With a Durable Power of Attorney, you designate an individual to make financial decisions on your behalf with respect to your individually owned assets. The power of attorney may be broad, or you may want to limit the powers that you grant to such an individual. If you already have a Power of Attorney that was created prior to October 1, 2011, you may want to have an attorney review it. The laws regarding these documents have been changed.
Health Care Directive/Living Will
With these documents, you name your health care agents to act on your behalf for medical treatment decisions if you are unable to act for yourself. These documents also express your specific wishes with respect to the administration of life-prolonging procedures when you can no longer communicate.