Estate planning is important for everyone regardless of how much you have sitting in your bank account or the value of your estate. If you fail to plan your estate while alive and you die, your family will suffer the consequences of your inaction.
In addition, if you fail to create an estate plan and you become incapacitated, the court would have to choose an individual who would make financial, healthcare and legal decisions on your behalf. With that said, it is very important that you plan your estate if you are yet to. Contact an estate planning attorney and get your estate plan underway!
Estate Planning is more than creating a Will
Some people believe that estate planning is just all about creating a will, and nothing more. However, the truth is that there is more to estate planning than creating a will. Estate planning involves the creation of other legal documents like beneficiary designations, power of attorney, healthcare power of attorney, trust, etc.
I understand that some of you may not be aware of some of these legal documents, including their uses. Thus, below, I have decided to provide you with details regarding these must-have documents.
Must-have Estate Planning Documents
Of course, the first on the list is a will. A will is a very important estate planning document. In fact, an estate plan is not complete without a will. A will is a legal document that contains the wishes of the estate owner. This legal document contains information regarding how the estate owner wants his assets to be shared, whom he wants a specific asset to be bequeathed to, etc.
A will also contains the name of the estate executor. An estate executor is an individual charged with ensuring that the wishes of the estate owner are fulfilled. In addition it is the job of the estate executor to ensure that the probate process is carried out smoothly.
A trust is a legal vehicle that enables an estate owner to transfer assets to beneficiaries. In a trust setting there is the grantor, the trustee and the beneficiaries. The grantor is the owner of the trust. The trustee is an individual or firm charged with managing the trust on behalf of the beneficiaries (third party). The beneficiaries are people designated by the grantor to inherit his or her assets at a certain time. A trust has several benefits, one of which is that it is effective in preventing the time-consuming, stressful, and costly probate process.
Letter Of Intent
A letter of intent is a document left to your executor or beneficiary. The purpose is to state what you want to be done to a certain asset after your demise or incapacitation. Some letter of intent contains information regarding how the estate owner wants to be buried. Unlike a will, a letter of intent in not valid in the eyes of the law. However, due to its important, you are advices to create one while planning your estate.
As said earlier, there are a lot of possessions you can transfer to your heirs without being dictated in the will (example are 401(k) plan assets). This is why it is essential to maintain beneficiary (including a contingent beneficiary) on such account. Insurance plans should consist of a beneficiary and a continent beneficiary as well because they might also pass outside a will.
If you fail to designate a beneficiary, or if the beneficiary is dead or unable to serve, a court could be left to outline how your funds will be managed and shared. And frankly, a judge who is not aware of your situation, beliefs, or intent is unlikely to make the same choices you would have made.
Worthy to note is that, designated beneficiaries should be more than 21 years of age and mentally competent. If they aren’t, a court may end up getting involved in the case
Healthcare Power of Attorney
A healthcare power of attorney is another important estate planning document. This document allows you to select an individual who will make crucial health care choices for you should you become incapacitated.
If you don’t have this crucial document, the court will designate someone to make those important healthcare decisions for you. This individual could be a family member, your doctor, etc.
If you need help in creating these documents, or you need more insight into these documents, don’t hesitate to contact an estate planning attorney Brooklyn.