Estate planning is essentially the process of filling out the correct paperwork and working with an attorney to ensure your final wishes are carried out. While it may seem confusing at first glance, with the proper help and knowledge, estate planning can be taken care of with relative ease.
It is important that everyone take the time to properly plan their estate now, so you can take the proper time to plan out what you would like to do with your estate. One of the most basic and necessary steps to ensure you have properly planned your estate is to execute a last will and testament. Unfortunately, many people do not have a valid will. In fact, a 2017 survey showed that nearly 6 out of 10 Americans have not completed a will.[1] Don’t let yourself fall into this group.
Your last will and testament is not only your way of ensuring that you dictate how your estate will be distributed to the people you want, but it can also stand as the final authority on who will take care of your children or your pets after you are gone. It can avoid timely and costly probate battles over who inherits from you, which can result in unnecessary tension and legal costs for those you love.
If a person passes away without a will, sometimes called “intestate,” the laws of the state where they live determines how all of their property is disbursed. Typically, these laws distribute your estate in varying proportions to people who are closest to you by marriage or blood. Leaving the distribution of your estate to the laws of the state is often time consuming. Your loved ones can end up spending time going back and forth about the proper distribution of your property. These laws also typically look only to spouses and blood relatives, which can lead to distant relatives receiving property you would rather have given to a good friend or charity. For these reasons, creating a will is perhaps the most important step to take in estate planning.
Power of attorney is another tool that everyone should consider during estate planning. Granting someone power of attorney allows them to act on your behalf when it comes to financial and medical decisions. Depending on the scope you grant to the person with your power of attorney, they will be able to make those types of decisions on your behalf. A medical power of attorney allows someone to make these decisions for you only when you are no longer able to do so. This can be useful if, for example, you have recurring payments or financial decisions that need to be made, even if you become incapacitated, or want to be sure that someone specific is in charge of making medical decisions on your behalf if you are incapacitated and cannot make these decisions yourself.
Another important aspect of estate planning is what is called a living will. A living will is similar to a medical power of attorney in some way, in that both handle how decisions about your health are made if you cannot make the decisions yourself. A living will is a “written declaration instructing his or her physician to withhold or withdraw death delaying procedures in the event of a terminal condition.”[2] This is a way to tell a doctor which procedures they can provide, and which procedures should be withheld. While no one likes to think this could happen to them, having a living will may reduce an already heavy burden placed on family members during such a trying time and allow you to make decisions about your health now, while you are able to do so.
Trusts may also prove a useful aspect of estate planning. A trust allows an individual called a trustee to hold money and property on behalf of a beneficiary.[3]The trustee is in charge of distributing the things in the trust to the beneficiary, typically based on certain parameters you put in place. A common misconception with trusts is that they are only used by people with large sums of money. There are many types of trusts and ways to set up trusts and they often makes sense in situations where, for example, you want to gift property to young children or would like to provide for someone to receive money in smaller amounts over a long period of time, rather than receiving everything at once. The trustee will ensure the property or money is properly looked after and that the beneficiary receives these things based on your desires.
Sherer Law Offices is experienced in helping people work through the estate planning process. For more information and help to start your estate planning or other matters, please contact Sherer Law Offices at (618) 692-6656.
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[1]https://www.caring.com/articles/wills-survey-2017
[2]755 Ill. Comp. Stat. Ann. 35/1 (LexisNexis)
[3]https://www.fidelity.com/life-events/estate-planning/trusts
