No matter the size of your estate, an estate plan can help to take care of both you and your family. Below are some of the common documents used in estate planning that are especially important right now:
- Health Care Power of Attorney and Living Will. Your Health Care Power of Attorney and Living Will documents allow you to appoint an agent to make health care decisions on your behalf if you are incapacitated, as well as to express your wishes should certain medical situations arise.
- General Durable Power of Attorney. Your general durable power of attorney allows you to appoint an agent to make financial decisions. In many states, such a document can be effective either immediately or in the event of incapacity. Spouses may name each other as agent and make the document effective immediately which may allow one spouse to transact business on behalf of the other in the event that one spouse is ill but not incapacitated.
- Last Will and Testament. Your Last Will and Testament names your executor and provides what will happen to your property should you pass.
- Guardianship. Your Last Will and Testament is also the best (and in many states, only) mechanism for planning for minor children. You can name the person you wish to serve as guardian for your child or children under your Will. If you fail to name a guardian, a court will be forced to appoint someone with no input from you. Additionally, minor children cannot hold title to property in their own names. A Will allows you to create a testamentary trust and appoint a trustee to serve as a fiduciary who is responsible for managing assets meeting the needs of a child or children. Your Will can also provide guidance to your trustee in the form of a testamentary trust.
- Revocable Trust. A Revocable Trust can be used to plan for incapacity as well as to avoid probate expenses. During your lifetime, you are the owner of any assets in your revocable trust. You also can serve as trustee during your lifetime; however, you can name a successor who will serve if you are incapacitated. Assets already in a revocable trust are generally not subject to probate, which is a cost savings for your estate.
We recommend reviewing your estate plan at least every five years or if you have had a major change in your family structure, such as a birth, death, or divorce. If you have no estate plan or have not updated your documents recently, consider contacting one of our estate planning attorneys today.