Estate planning is a very important part of your family's emergency plan. Yes, you would hope that in your younger years you do not need to access the estate plan, but simply hoping for the best does not make it so. This is why everyone should have an estate plan. Here are four things that your estate plan will include whether you are old or young.
1. A Will
A will is used for different things than it was historically. It used to be that wills held possessions, money and assets. However, a will must go through a process called probate, meaning that the courts mandate the division of the will so that everything in your will goes on public record. This is why most estate-planning attorneys suggest that you avoid putting your money in the will. Instead, just name a guardian for minor children in the will and any specific instructions about how you want your family to operate after your death.
2. A Trust
A trust is where you will put the majority of your estate, property and money. Unlike a will, a trust doesn't have to go through probate. Instead, you will name a beneficiary. When you die, the trust will transfer directly to the beneficiary. There can be strict instructions in the estate as to how the estate is divided. This means that you can say how you want your family to get your money, where you want certain properties to go, and so much more. This is all done off public record.
3. Medical Power Of Attorney
Another important part of an estate plan is naming someone as your medical power of attorney. This means that if you are unable to make medical choices for yourself, this person acts as your voice. If you don't have a medical power of attorney and something does happen, the court will have to appoint one for you. This can be a long and frustrating process, especially for your family. This is why it is best to appoint someone as your medical power of attorney who shares your same views.
4. Legal and Financial Power Of Attorney
Much like the medical power of attorney, you need someone to speak for you in legal and financial capacities. This person will be able to make legal decisions for you and access your bank accounts so that payments can be made.
These are the four things that your estate plan will include. If you don't have an estate plan, you should get one right away! Contact an estate planning attorney like Stuart W. Moskowitz, Esq., CPA.
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