A part of our lives is the birth and death of love ones. It is a known fact 100% of us will die. The question is have you started estate planning? What happens if you’re injured in an accident? Or, you are sick and can’t talk for yourself? What do you do with your grandmother rings, or your mother’s table? There are so many things besides your home, bank accounts, cars, you need make you wishes known. There are several steps you can prepare to protect yourself.
The process of estate planning includes:
- Inventorying your assets.
- Talking over important decisions with family members.
- Drafting a will and living trust.
- Preparing a financial and health care power of attorney.
Once you’ve completed these steps you can prepare:
Pour-over Will – Upon your death, your Executor or “Personal Representative” is responsible to carry out the directions of your will. Your Executor will collect the assets of the estate, pay the estate’s debts and taxes, and distribute the balance to your living trust. Your Executor will also be responsible to take care of your funeral and burial arrangements.
Financial Power of Attorney – A Financial Power of Attorney allows you to appoint someone you trust (also referred to as your “attorney-in-fact,” or “Agent”) to make decisions for you or in regard to your assets in the event you are unavailable or unable to do so. When accidents, sudden illness, planned or unexpected absences occur, you may need someone to manage your financial affairs. The Power of Attorney will cover tasks like writing or endorsing checks, paying your bills, managing your property, and handling other money matters including complex business transactions.
Health Care Power of Attorney – Health Care Powers of Attorney are written documents that tell your doctors what kind of treatment you’d like to have if you become unable to make or communicate medical decisions (e.g., if you’re in a coma). A Power of Attorney that deals with “end of life” decisions may be referred to as an advance directive, a proxy, or a living will, depending on which state you live in.
Living Trust – No longer are they tools just for the rich, Living Trusts are one of the most common estate planning tools in use today. This legal arrangement creates a separate entity called a Living Trust. It is referred to as a “Living Trust” simply because it is created while you’re alive (as opposed to a “testamentary” trust created after death).
A living trust is a good way to keep an estate from going through probate. You transfer your assets to a living trust, which then owns your assets. Almost anything can be placed in a trust: savings accounts, stocks, bonds, real estate, and personal property. The good news is that you can then appoint yourself as the trustee, and thus can control the trust as long as you live. When you die, the trust passes directly to your named beneficiary without having to pass through probate, as it would have to with a will.
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