As we go through life, our priorities often shift from being more self-interested to more self-sacrificing. After all, many of our lives change from caring only for ourselves to caring for our families. And what more selfless act is there than ensuring our loved ones are taken care of after our deaths? Unfortunately, 62 percent of Americans have yet to begin estate planning despite most people agreeing that making arrangements is a smart move. If you’re one of the thousands of Americans that have yet to put pen to paper, there’s no time like the present to begin. When you do take the plunge into estate planning though, it’s important to cover all your bases to ensure your wishes are followed to the letter.
Step 1: Make Plans for Your Minor Children
Perhaps one of the most important decisions you need to make when estate planning is what will happen to your minor children if you pass away. If you’re married, it can be a no-brainer. Of course, your spouse would care for them. But, what if you and your spouse are both gone? This is when the tough choices come in. You may want to consider who in your family or circle of trusted friends can afford childcare or whose parenting style you can appreciate. This decision is highly personal and will likely require a candid conversation with any potential legal guardians. After all, you want to make sure your chosen guardian actually wants to care for your children in the event of your death. Once you’ve decided and the would-be guardian has agreed, this will be one of the most vital points to mention in your estate planning documents.
Step 2: Choose What Happens to Your Assets When You’re Gone
You don’t have to have an old-timey manor and a butler named Jeeves to have “an estate”. Your estate is the collection of all your assets, debts, and obligations. This may include your car, your house, your savings, and even your dog. That’s right. Fido may be part of the family, but legally he’s still considered property and is, therefore, part of the estate. With that in mind, you might want to consider what happens to each of your assets in the event of your death.
If you have any debts upon death, these will be paid off first before your executor or trustee can distribute your belongings to your loved ones (your beneficiaries). Consider what you’d like to happen to your house or vehicle in an ideal world. How would you like your account funds distributed? What happens to those family heirlooms? Who takes care of Fido after you die? You can make these decisions however you’d like – whether you give it all to your children or you donate your entire estate to a beloved charity. It’s entirely your choice.
Step 3: Decide Between a Will or Trust (or Both!) While Estate Planning
When you think “estate planning”, you probably think of a will. However, wills aren’t the only estate planning documents out there. Living trusts also provide unique protections for your estate.
Wills are straightforward legal documents that allow you to establish your wishes for the distribution of your assets, guardianship of your minor children, and any funerary arrangements for your body. They can be amended throughout your lifetime but are only active upon your death. Wills also go through probate court and can be challenged if there is doubt of the validity or clarity of a given document.
Living trusts are very similar legal documents in which you can express your wishes for asset distribution. However, these documents are active from the day of completion, not after death. You can change them freely during your lifetime if you choose to draft a living trust. Trusts aren’t subject to probate court after you’re gone, allowing for a faster property transfer. Typically, friends or family members cannot challenge a trust.
While wills have executors that control the distribution of assets following your death, trusts appoint trustees – a third party who will privately oversee the distribution of assets from your trust. It is possible to have both a will and a trust. However, you should take care when choosing which will best serve your needs.
Step 4: Consider Healthcare Directives
Estate planning isn’t only important after your death. Your estate planning packet can also include documents that dictate end-of-life care as well. Healthcare directives express your wishes regarding your personal health should you be unable to make those decisions any longer. You may need to decide how long you’d be comfortable being kept on life support, what happens when you suffer irreparable brain damage, and more. This is also a good opportunity to name a trusted loved one who can make healthcare decisions for you if you haven’t outlined a situation in your directive already.
Step 5: Do You Need a Power of Attorney?
Powers of attorney (or POAs) are the final estate planning piece of the puzzle for many people. POAs are legal documents that appoint an individual as your “agent”. Your agent can make decisions for you regarding your finances or property. For this reason, they often go hand-in-hand with healthcare directives. Like a healthcare directive, POAs are useful in situations such as falling into a coma or suffering from severe Alzheimer’s disease in which you may be unable to decide certain things for yourself.
Although you may be concerned with your healthcare in these instances, your property and finances may still require authorization from you for important processes. These may include freezing your credit or opening or closing a bank account. This is where a trustworthy agent may be of use.
Estate Planning Assistance in the Inland Empire
Once you’ve chosen how you’d like to complete your estate planning, it’s time to get help with the complicated paperwork. The local legal document assistants at ProSe Legal are highly experienced in estate planning document preparation! With the ProSe Advantage, you can be confident that we’ll complete your documents right the first time in accordance with local requirements.
If you need help navigating your estate planning paperwork,
or call (909) 224-4361.
