Nearly everyone can benefit from estate planning, not just those who have significant assets. That is because comprehensive estate planning is about making prudent decisions about what you want to happen with your life and your property in the event that you are either not around to make those decisions or are not capable of making those decisions for yourself.
While everyone’s life and financial situation is different, here are four documents that nearly everyone should consider, regardless of their age or financial situation.
Most people think of a will as simply the document that indicates who should get what when you pass away. But wills can do much more.
Importantly, if you die without a will (known as dying intestate), then the state decides who should get your property under intestate succession laws. Probate on an intestate estate can be a very lengthy process, and intestate succession rules may be directly contrary to what you would want.
Having a will allows you to control many aspects of the probate process, as well as to dictate who is in charge of carrying out your wishes. You can make special bequests such as a charitable gift to an organization, or a special item to a beloved friend. A will can also address other matters such as guardianship of your minor children, which is tremendously important whether or not you have any assets to distribute.
2: Durable Power of Attorney
A Durable Power of Attorney, or DPOA, grants legal authority to another person (or persons) to make decisions on your behalf should you be unable to do so for reasons of mental or physical incapacity.
DPOAs can be executed for financial matters or medical matters or both, and you can designate different individuals to have different authority. You can also specify when the DPOA becomes effective.
Unless you execute a DPOA to empower someone you trust to make these important decisions for you, these decisions will be taken not only out of your hands, but out of the hands of people whom you believe will act in your best interests. Moreover, going through a court-ordered guardianship hearing can consume time you don’t have, and result in a choice you don’t like.
3: Advance Healthcare Directive
Unfortunately, there are times when people may not have the ability to make important healthcare decisions for themselves, such as after a car accident or other health crisis. In these cases, having an advance healthcare directive in place makes it clear to both medical professionals, as well as family members, what it is you would like for yourself in that situation.
An important aspect of the directive is that it relieves your loved ones from the responsibility and moral burden of having to make difficult decisions in highly stressful situations. For example, if you make it clear that you do not want risky and complicated invasive surgery that could leave you bed-ridden even if it may save your life, then your family can assent to that decision knowing it is what you would have chosen.
4: Revocable Living Trust
Trusts are not just vehicles created for wealthy heirs and heiresses. There are very many different types of trusts, one of which is a revocable living trust.
“Revocable” means that, even if you put all your assets into the trust now, you can revoke the grant if you need to use them for some other purpose at a later date, or even dissolve the trust completely.
The “living” part of it means that the trust is created to benefit you during your life, and, if desirable, the life of someone else, such as a spouse or a child (even after you are gone). You can remain a trustee, and name additional trustees who can administer the trust in conformance with its stated purpose should you die or become incapacitated.
Trusts can have many advantages, such as enabling your estate to avoid the probate process, reducing estate taxes, addressing unique situations (such as a special-needs child), or providing for ongoing care of a spouse or minor child after you pass away.
All four of these estate planning documents – will, DPOA, advance healthcare directive, and revocable trust – can be put into place now to give you peace of mind. Should anything happen to you, it’s important to know that you’ve already made provisions to properly care for your loved ones in accordance with your wishes. For expert advice on these or other estate planning needs, contact the professionals at eLegacy Law, and start planning for your future today.