The estate planning process might seem daunting at first, but organizing it down to five steps can ensure it stays a simple and doable approach for everyone. While there are many things to consider, the five we will focus on are the will, trusts, power of attorney, healthcare, and beneficiaries. This is a great first step in tackling your estate planning, especially if you have the assistance of an estate planning attorney.
1. The Will
A will is an essential piece of any estate planning process. It will stop the state from choosing who represents you and where your assets get distributed. A will is your chance to outline exactly what you want after you are gone, who you want to represent you and your wishes, and where you want your assets to go, whether that be to family and friends or a charity of your choice.
Additionally, a will outlines the care of any pets or minor children you might be leaving behind. If you don’t want these terms to be settled by your state, a will is a crucial document to write up with an attorney.
Trusts are the next step after a will, ensuring that your desires are met legally by those you choose. Utilizing irrevocable or revocable trusts allows you to write in no uncertain terms what the purpose is for the assets and money you hand down to beneficiaries. You can specify what they must use it for, whether that is your own well-being if you are incapacitated or if it is a college fund for your grandchildren.
If you go through the steps of writing up trusts, you might be able to help your family avoid the probate process, saving them time and money. In addition to a will, trusts are your opportunity to ensure that all the assets you have worked for are properly distributed and used at your discretion.
3. Power of Attorney
A power of attorney might be something we find unnecessary as we don’t want to imagine a situation where it’s needed, but it is better to have one than have the state choose one for you. Choosing a power of attorney is choosing a family member to make decisions on your behalf. They will step in and manage your finances in case you become incapacitated. You can also decide the level of discretion and guidance you want them to have.
4. Medical or Healthcare Power of Attorney
Next to a financial power of attorney, a medical power of attorney is essential. Whoever you choose to fill this role will be your voice and decision maker if you cannot because of a debilitating medical condition. A medical power of attorney will also implement your wishes in the scenario of grave illness or injury, ensuring that your desire to be kept on machines or not is followed through.
A medical power of attorney is only necessary if you can no longer communicate your wishes in a medical emergency.
5. Beneficiary Designations
One of the last things to ensure you are doing in your estate planning is naming the beneficiaries to things such as insurance policies, bank accounts, retirement funds, or other financial assets you will want to hand down to family or friends. Naming your beneficiaries can be done within the financial accounts themselves or with the assistance of an estate planning attorney.
If you don’t name specific beneficiaries for your assets, the choice will be given to the state upon your death. This might leave your assets being given to the wrong people or places.
Your estate planning process does not need to be a confusing one. If you want to start the process and need assistance, contact the team at Hartmann Law.