Estate Planning Basics
Updated: Mar 5, 2021
There are several key documents an estate plan should include to protect you and your family if you should suddenly become very ill or pass away:
Last Will and Testament and/or a Trust
A will enables you to specify the individuals you would like to receive your money and property. In addition, you can name a guardian(s) to care for your children or other dependents if you are unable to do so and a conservator to handle their financial needs. For many, however, a will alone is not the best solution, as it is only effective after you pass away.
In a revocable living trust, you can name yourself as a trustee and continue to exercise control over the money and property you transfer to the trust. However, it also enables you to name a co-trustee or successor trustee who can manage your money and property for your benefit and the benefit of any other beneficiaries of the trust if you become too ill to do it yourself. In addition, your trust can specify when and how the funds should be distributed to your beneficiaries when you pass away. Further, if you have transferred all of your property into the trust, it will not have to go through the probate process—which can be expensive, time consuming, and open for public viewing.
For some, other types of trusts may be appropriate to achieve particular goals, for example, protecting assets from creditors or providing for a child with special needs.
Note: If you do not create a will or trust specifying who you would like to receive your money and property when you die, it will pass to the individuals specified in the state intestacy statute, who will receive the shares mandated by the statute. This is not ideal, as the people and shares spelled out in the statute may be vastly different from what you would have specified in your estate planning. In addition, a court will need to appoint a guardian and/or conservator to care for any minor children—and the person appointed may not be the individual you would have chosen.
Powers of Attorney
Using a power of attorney, you can name people you trust to make decisions on your behalf if you become ill and are unable to make decisions for yourself. Even if you are married, it is still important to have a power of attorney in place to name a successor agent in case your spouse is unable to make decisions on your behalf.
A medical power of attorney can be used to name a trusted person as your agent to make medical decisions on your behalf if you are unconscious or otherwise unable to communicate your wishes to your health care provider. As your agent, the person you have named is required to act in accordance with your wishes to the extent that they are known to that individual.
A durable financial power of attorney will allow the person you have named as your agent to make financial decisions and conduct business on your behalf if you cannot handle these matters for yourself. It can be as broad or as limited as you choose: For example, you could authorize your agent to make gifts on your behalf, or you could simply authorize your agent to write checks and pay your bills on your behalf.
Note: If you do not name trusted individuals to act for you in medical and financial powers of attorney, the individual you may want to make those decisions may have to go to court to be appointed to this role. As in the situation in which you do not have a will or trust, you no longer have any control over who is named to act on your behalf. The person appointed by the court may not be the person you would have wanted to take on these important roles.
Declaration of Designee for Final Disposition
A declaration of designee for final disposition may be used to designate an individual for making decisions concerning the final disposition of your remains.
Give Deeney Law Firm a Call
Certain situations or events can bring our own mortality to the forefront of our minds, even if they are unlikely to have a severe or direct effect on us. 2020 has likely presented one or more concerns that have prompted most of us to consider our own mortality.
Take the steps early in 2021 to put your estate plan in place. Our goal is to give you confidence that if you become ill, your own care and the needs of your family will be addressed. Call us at (319) 400-8488 today to set up a free 30-minute consultation, which can occur virtually if you prefer. You can also schedule a free consultation through our website at www.deeneylawfirm.com