A will is just one of a handful of documents every adult should have in place to protect themselves while they are living, and their heirs and families after they have passed away. Here are the “5 estate planning must-haves,” according to an article from the Augusta Free Press:
- Wills and Trusts. Your will directs the distribution of your assets. Without a will, the court will determine who gets your possessions, real property and any other assets, following the laws of your state. Depending on your situation, you and your heirs may benefit from setting up trusts to protect your assets from the probate process, maintain your privacy and possibly avoid some taxes. Keep in mind that if the will or trust is not created properly or doesn’t follow your state’s laws, it could be challenged or deemed invalid. Work with an experienced estate planning attorney to protect your family.
- Many of your accounts—bank accounts, investment accounts, retirement accounts, insurance policies—may already have a named beneficiary, who will inherit the account upon your death. However, if you have not updated those names recently, you may find the wrong person inheriting your assets. Once that occurs, there is no legal means of transferring the assets to another person. Always make sure you have a contingent (or secondary) beneficiary named, so if the primary beneficiary dies before you, or for some reason declines to accept the asset, you will have had an opportunity to choose another person to receive the asset. If there is no contingent beneficiary, the court will make that decision.
- Letter of Intent. It must be said that this is not a legally binding document. However, the information it could provide to your loved ones might be very helpful, as they move through the process of settling your estate. It can explain why you structured your asset distribution the way you did, why you would want a given family heirloom passed to a specific family member, or what you would like to have happen at your funeral. If you are not able to discuss these matters in a face-to-face conversation with your loved ones, this is a useful alternative.
- Power of Attorney. Planning for incapacity is an important part of estate planning. If you become incapacitated, you’ll need to have already given someone the power to manage your financial affairs. If you do not have a power of attorney, your family will need to turn to the court system, which will create delays and added stress. You’ll also want to have a healthcare power of attorney in place. Most people assume their spouses will immediately take on this role, but not everyone is capable of making the hard decisions, especially during an emergency situation.
- Legal Advice. Estate planning laws are governed by your state of residence. Your best option is to make an appointment with a local estate planning attorney to learn whether there are any other documents and plans you need to put into place. Some law firms provide a means of documenting assets to ensure that, at the time of death, your family isn’t on a scavenger hunt to identify assets. In certain states, you can assign a funeral representative to make sure your funeral, burial or cremation and memorial service wishes are carried out. Your attorney will know what you and your family need.
Reference: Augusta Free Press (Nov. 27, 2018) “5 estate planning must-haves”