Estate planning is not just for wealthy people. In fact, it’s even more important for those who are not rich, but want to prepare for their family’s future.
Estate planning could be difference between a person getting the end of life care you want or being resuscitated against their wishes and ending their days in a nursing home bed. It’s just as much about what happens when people are alive, as it is after they have passed. It’s not just for people with a lot of money.
FedSmith’s article, “Estate Planning for Federal Employees,” says that at the very least, you should understand what estate planning is, so you can make a decision regarding the legal documents you need. You don’t want to create a stressful problem for your family and loved ones. We also want our wishes carried out, when we pass away. Take a look at these important estate planning documents:
Last Will and Testament. This document states your wishes for distributing assets after death. Everyone needs a will, even if you’re a person of modest means. If you don’t have a will and die (this is known as dying “intestate”), a judge may determine who gets property that does not have a surviving joint owner or designated beneficiary. Your will can also designate who you want to care for your minor children, if you pass away. You can also name who will manage your assets for the children.
Living Trust. A living trust avoids probate and is private. The reason it’s called “living” is because you create it while you’re alive. The creator of the trust transfers ownership of assets to the trust, but still controls the assets in the trust during his or her lifetime. The creator and manager of the trust is technically no longer the owner of the assets. At death, the trust assets are transferred to the designated beneficiaries. In addition, if your living trust is “irrevocable,” then it may protect your assets from creditors. Work with a qualified estate planning attorney to set it up correctly.
Healthcare Power of Attorney. This is also known as a durable power of attorney for healthcare. It’s a legal document that gives a person of your selection the authority to make healthcare decisions, if you are incapacitated.
Living Will. A living will is a legal document that details how you want your end-of-life decisions to be handled.
Financial Power of Attorney. This allows a trusted agent to act on your behalf, if you’re incapacitated.
What many people don’t understand is that estate planning documents are different, depending on what state you live in. If you own property in multiple states, you’ll need to ensure that any documents are valid and follow the laws of those states. Work with an experienced estate planning attorney in your state, so your plan is prepared properly.
Reference: FedSmith (June 27, 2018) “Estate Planning for Federal Employees”