Just as it is important to plan and save ahead for university tuition fees, estate planning serves similar purpose. Just that estate planning has a broader scope. Having an estate plan saves you from regret.
It is wrong to call a will an estate plan. An Estate plan covers a wider range compared to a will. A will is just one aspect of an estate plan. Estate Planning involves various aspects such as last will and testament, trust, heath directives, retirement plans, financial power of attorney, etc. These together makes up an estate plan.
Need for an estate plan
For most families and individuals, a will might just be enough for making provision ahead for the future but with expansion and increase, a will may not be enough anymore as a plan will be needed to cater for all the available assets.
Estate planning checklist
In order for your estate plan to be effective and free from mistakes, you will need to work with a checklist. A checklist helps you arrange and organize everything in a nice way. Steps involved are:
Financial Power of Attorney
This will give you the chance to choose a person who is going to be making the calls regarding your finance if you happen to become incapacitated at any point. This person could be your spouse, an attorney, a sibling, etc. The person is legally obligated to make decisions only in your best interest. Failure to choose a power of attorney means there will be no one to make necessary decisions regarding your finance in the case of incapacitation.
Health care proxy
This is similar to a financial power of attorney. Here, the person will be calling shots regarding your health. This document takes effect when you become incapacitated and unable to make medical decisions for yourself.
Last Will and testament
This is a very important part of your estate plan as it conveys your intentions regarding how you want your estate to be distributed among your heir when you die. Failure to include this in your estate plan means after your death, your assets will go through the process of probate to determine how your assets will be distributed.
Setting up a trust
A trust is a legal document which allows you to transfer assets to your heirs without going through the probate process. It allows the trustor to give legal ownership title to the trustee for the benefit of the beneficiary. This is a good way of avoiding the probate process. There are different types of trust; there are trusts that are revocable while there are others that are irrevocable. The irrevocable trust is fixed trust.
Funeral and memorial instructions
It is advisable to create a separate document aside your will solely for this purpose. This is so because your will won’t be opened until after your funeral. So how your burial rites should be performed should be in a separate document. Make sure your loved ones are aware of this separate document.
Make a list for accounts details
This is another vital document which you should not forget to include in your estate plan. It should contain your login details to various accounts such as bank accounts, social medial accounts. If you have active brokerage accounts, these documents should contain its login details.
Making provision for your young child
It is never expected or prayed for but In the case of untimely death of you and your spouse, your young child (if you have) will need a guardian. A guardian is someone whom has been given the legal right to take care of another person. Without making this plan, your child’s guardian will be chosen by the court.
Regular review and update of your plan
This step is also very vital. The circumstance that influenced your decision making as at the time you made your estate plan must have changed overtime. This demands that you update your estate plan so that it will be current with current happenings. Also some life events such as the birth of a child, death of a spouse, marriage, divorce, etc. may also trigger a need to update your estate plan.
In doing all this, the guidance of a professional attorney is highly recommended. Our attorneys are always available to offer such assistance.