The Basics of Estate Planning
Do you have an estate plan? If you’re like 60% of U.S. adults, chances are you haven’t gotten around to it yet. Maybe you think you don’t need one or you think that you’re too young to worry about it—but the truth is, everyone needs at least a basic estate plan in place regardless of their age or financial status.
Everything you own is part of your estate—and you will want to make sure it goes to the right place when the time comes. Even if you don’t have many quantifiable assets, it’s essential to create an estate plan to detail your last wishes and to protect your loved ones after you’ve passed away. Without the proper legal documents, the state could decide not only what is to become of your property but also who will be the guardian to any minor children you have. These are important decisions that you shouldn’t leave in the hands of a judge.
The following are some basic documents that you will want to ensure are included in your estate plan.
In your will, you’ll designate the beneficiaries of your estate as well as who you want to be the legal guardian of your minor children in the event that they are left without a parent to care for them. This legally binding document will also allow you to name the executor of your estate, which is a person with the authority to ensure that your final wishes are followed according to the terms that you have set in your will.
With a living will, you can outline your health care directives if you happen to become incapacitated. You will be able to detail the type of life-prolonging medical treatments that you want—or don’t want—to receive, such as:
- Blood transfusions
- Respiratory assistance
- Drug administration
- Intravenous (IV) feeding
If you do choose to forgo these medical interventions, you can indicate your preferences regarding palliative care, which are treatments that are designed to relieve pain and keep you comfortable without taking life-extending measures.
Durable Powers of Attorney
These documents are used to elect someone to handle your health care and financial matters on your behalf should you be unable to do so. You should appoint someone you can trust, like a spouse, close friend, or other family member. Your health care proxy will be responsible for ensuring your health providers give you the type of care that you have specified in your living will. Your financial agent will be able to pay your bills, disperse funds to your loved ones, and tend to other financial concerns on your behalf.
There are typically two types of living trusts: revocable and irrevocable. Most people opt to use revocable trusts because they can be amended up until their death. An irrevocable trust, however, can only be modified under certain strict conditions. A revocable trust is the best choice for most individuals. When you are creating your living trust, you will name a successor trustee, a person who will be responsible for managing the trust should you become incapacitated or pass away. They will use your assets to pay for final bills and taxes as well as for the medical, education, and living expenses of any minor children you have listed as a beneficiary of your estate. Once the minor has reached the age that you have specified, he or she will be given whatever remains in the trust.
One of the main advantages of using a living trust is that your beneficiaries won’t have to worry about going through probate court once you’re gone. Outside a living trust, your property can become subject to probate, a legal process in which a deceased person’s estate is reviewed and then administered to the rightful recipients. Probate can be very expensive and hold up the distribution of assets by months, which is why a living trust is recommended for anyone who has considerable assets.
Life Insurance Policy
Life insurance should be an important part of your estate plan. It can be used to support your dependents when you are no longer able to do so. It is especially beneficial for providing the immediate funds that your loved ones will need to pay for your final expenses like funeral costs, taxes, and other outstanding debts so that family members aren’t burdened by them.
If your family has grown, you may need to update the beneficiaries on your bank accounts and retirement plans. These accounts will be payable upon your death and won’t have to go through the probate process. You can do the same for any bonds, stocks, or brokerage accounts.
When someone dies, their loved ones are often left to make funeral arrangements on their behalf. This can be overwhelming during such an emotional time. You can alleviate some of the burden for your family by writing down your wishes and storing the letter with your other estate documents. You could include details like:
- Burial or cremation instructions
- Location of funeral or memorial service
- Clothing or jewelry you’d like to wear
- People you’d like to invite to your service
- Types of flowers you’d like to be displayed
- Who you want to perform the eulogy
- Instructions for your viewing and/or wake
Outlining your preferences beforehand can bring your loved ones peace of mind because they won’t have to worry about these last-minute details. You can also prepay for your funeral costs or set aside enough funds in a trust for your beneficiaries to cover them.
Contact an Estate Lawyer Today
With so many things to consider, estate planning can be a complex and confusing process, but a lawyer can help you ensure every detail is covered. Contact the Law Office of Kyle W. Jones in Bakersfield today to schedule an appointment. We will work with you to create a personalized estate plan that protects you, your assets, and your loved ones.