If you own any possessions, assets, or property—regardless of their value—then you have an estate, and you need estate planning. While the term “estate” might conjure images of mansions, it simply encompasses everything you own during your lifetime. Anyone who wants their assets transferred to loved ones efficiently after they pass away should develop an official plan. Crucially, your estate plan provides the vital documents needed to speak for you if you become unable to speak for yourself.
An estate plan is a set of legal documents that protect your assets, detail their intended transfer, and establish who will speak for you in case of incapacity (through essential documents like Powers of Attorney and Living Wills).
A will or trust should be the main foundation of every estate plan, even if your estate is small. Wills ensure property is distributed according to an individual's wishes. Some trusts help limit estate taxes or legal challenges.
It's important to draft a durable power of attorney (POA), so an agent or a person you assign can act on your behalf when you are unable to do so yourself. This document can give your agent the power to transact real estate transfers and enter into financial transactions.
A living will is your end of life directive to your care giver. It indicates your wishes regarding life prolonging efforts to be made once two Doctors have declared your condition as terminal and irreversible.
A number of your possessions can pass to your heirs without being dictated in the will (for example IRA or 401(k) assets). This is why it is important to maintain a beneficiary—and a contingent beneficiary—on such accounts.
A healthcare power of attorney designates another individual to make important healthcare decisions on your behalf in the event of incapacity. You should pick someone you trust, who shares your views.
If you have minor children or are considering having children, picking a guardian is incredibly important and sometimes overlooked. Make sure the individual or couple you choose shares your views, is financially sound, and is genuinely willing to raise children.
A step-by-step approach to protecting your legacy
You may think you don't have enough to justify estate planning, but once you start looking around, you might be surprised by all the tangible and intangible assets you have.
Once you have a sense of what's in your estate, think about how to protect the assets and your family after you're gone.
A complete estate plan includes important legal directives. Review your beneficiaries and your state's estate tax laws.
Everyone should work with a professional to develop their estate plan, regardless of the size or complexity of their estate. Life is always changing, so be prepared to review and update your estate plan as needed to reflect major milestones.
Protects your possessions for your family members (or other
beneficiaries).
Offers you a say in who obtains your belongings.
Permits you to choose who makes your decisions.
Talk to us at TTG Financial to learn more information regarding estate planning and how it might work for you.
