No matter how old (or young!) you are, no matter the size of your estate, or how far away retirement is, you need an estate plan. Life happens, often unexpectedly, and an estate plan protects you and your family.
One of the reasons for an estate plan is to provide detailed instructions to your spouse and/or your family members about what you would like to happen in the event of your death or if you should become incapacitated. According to a recent article in cincinnati.com, “Now is the time to consider the basics of estate planning,” that information will make it easier for a family experiencing a major loss.
A will is a legal document that details instructions for the distribution of your property after you pass away. It also allows you to choose a guardian for minor children or other dependents. Your will should name the executor or personal representative who’ll be responsible for overseeing your estate as it goes through probate.
To be legal, a will must satisfy legal requirements. Therefore, you should work with a qualified estate planning attorney during this process. If you die without a will (“intestate”), the state will appoint an administrator to decide how to distribute your property based on state law. The administrator also will decide who will be the guardian of your minor children. This means your assets may be distributed and your dependents cared for in ways that differ from what you would have intended.
A living trust can help with some aspects of the probate process. A trust is a legal entity to which you, as the grantor, transfer title to your property. During your life, you can be the trustee and keep control over the property in the trust. At your death, the individual or bank/trust company you’ve named as the successor trustee distributes the trust assets to the named beneficiaries. The assets in a living trust generally avoid probate. Nonetheless, a living trust doesn’t eliminate the need for a will.
Don’t forget to have your estate planning attorney prepare powers of attorney documents. Start with a durable power of attorney, which designates a trusted individual to make financial decisions, if you are unable to do so. Another POA is for health care: that person can make medical decisions on your behalf in the event that you are incapacitated. You definitely want a health care agent who can make decisions for you if you cannot, and you want this document to clearly detail your wishes.
Reference: cincinnati.com (November 2, 2017) “Now is the time to consider the basics of estate planning.”