While nobody looks forward to doing it, estate planning is a must for everyone. This gives you control over what happens if you reach a stage where you are mentally incapacitated and after you pass away. Estate planning not only takes care of asset division but also reduces the risk of family feuds over property division. Hence, this is something that must be carefully thought out and planned with the help of an estate lawyer.
There are many aspects to estate planning. Here are some of the things that you must include.
There is no use in planning your estate and drawing up a will if nobody knows about it. It is always best to keep all your documents in one place or file so that they can be accessed easily. That said, it isn’t necessary for everyone to know where you have kept your will; only the executor needs to have access to these documents which include:
- Your will
- Your insurance policies
- The deeds to all real estate assets
- Information on your bank accounts, safe deposit boxes, and mutual funds
- Certificates of your bonds, stocks, and annuities
- Details of trusts
- Information about your IRAs, 401(k) accounts and retirement funds
- Information on any debts you may have. For e.g., mortgages, loans, unpaid taxes, utility bills, and credit card bills
- Your end of life wishes regarding organ donation and funeral arrangements
With the help of an estate planning software, you can access these documents anytime, anywhere. The software also ensures that managing different versions of various documents is hassle-free.
- A Will
Whether you own several country homes or a single apartment in the city, you must decide what happens to your assets after you die. Your assets also include jewelry, stocks and shares, cars you may have inherited from your parents and grandparents.
These assets should be listed in your will along with the beneficiaries. A will must be reviewed and updated from time to time to stay current. For example, if one of the beneficiaries of your will pass away before you do, a change will be needed in your will.
- Living Will
Estate planning looks at not only what happens to your assets after you die but also what would happen in case you are terminally ill or injured or mentally incapacitated in any way. A living will is also known as an advance directive.
This document deals with your wishes as to what kind of treatment and life support you want and don’t want. It also includes whether or not you want to be resuscitated in certain instances. This helps prevent confusion and disagreements amongst the family members.
- A Medical Power Of Attorney
Apart from the financial power of attorney, you also need to designate a medical power of attorney. This gives a person you trust the power to make medical decisions on your behalf if you are physically or mentally unable to take care of yourself and make decisions about your health.
A medical power of attorney may also be known as a healthcare agent or a surrogate. Apart from writing all your wishes down in your living will, you must discuss your views on life-prolonging treatment and resuscitation with the person you are trusting to make medical decisions for you.
- A Financial Power Of Attorney
A financial power of attorney refers to a person who will be authorized to take financial decisions on your behalf. The person giving authority is known as the Principal and the person who is given the authority to act on behalf of the principal is known as the attorney-in-fact or the agent. Depending on where you live, you may have to fill out an official power-of-attorney form.
The wording of the Power of Attorney document determines whether the transfer of power becomes effective immediately or in the future if and when certain events happen. The latter is also known as a springing power of attorney as it ‘springs’ into effect only after an event occurs. The authority given to the agent always ends upon the death of the principal unless otherwise specified.
There are many other elements that may be included in your estate plan depending on your personal situation and needs. For example, if you have small children, you should name a guardian to raise them in case something happens to you and your spouse.
Similarly, if you own a business, you will need to put a succession plan into place. Hence, to ensure that you do not miss out on anything, always hire an established estate lawyer to help you plan your estate.