The process of anticipating and preparing for the transfer of a person’s wealth and assets during his or her life. Estate planning typically attempts to eliminate uncertainties over probate administration and maximize the value of your estate.
Put Simply: estate planning is making a plan in advance that names whom you want to take care of your loved ones and whom you want to receive your things after you die.
What does your estate consist of?
- Your home and other real estate
- Tangible personal property such as cars and furniture, and
- Intangible property like insurance, bank accounts, stocks, pension and social security benefits.
What documents are typically included in an estate plan?
- Last Will & Testament
- Revocable Living Trust
- Durable Power of Attorney
- Designation of Patient Advocate
Last Will and Testament
Your Will controls distribution of your property at death. It is written while you are alive and carried out once you have passed. Wills typically require the involvement of the Probate Court.
A Revocable Trust is created to manage your assets both during your lifetime and at your death. It permits you to reduce or eliminate estate taxes and to avoid probate. It can provide for minor children and individuals with special needs. Benefit of Revocable Trusts include protecting the privacy of your estate plan, and you retain complete control of your assets during your lifetime.
Powers of Attorney
- A Durable Power of Attorney gives the agent you appoint the ability to act in your best interest to handle financial affairs in your absence or when you are unable to.
- A Designation of Patient Advocate allows you to appoint an agent to make medical decisions on your behalf in the event you can’t do so yourself. You are also able to state your wishes for the kind of treatment you do or don’t want to receive if you become incapacitated.
What happens if you don’t plan?
If you die without a will or trust, you’ve in effect left it to state law to write your will for you. That means the state will make certain assumptions about where you’d like your money to go—assumptions with which you might not agree.