Nearly Everyone Has an Estate
To many, Estate Planning sounds like something only the wealthy must worry about. When we hear the word “estate,” mental pictures of large homes and massive acreage come to mind. Perhaps we even imagine generation after generation inheriting old money and old properties. For these reasons, many have no idea they need to seek Estate Planning assistance themselves. Most aren’t even aware they have an estate to be concerned about.
If you don’t think you have an estate to plan for, think again. Nearly everyone has an estate. Your estate is simply everything you own – your car, home, bank accounts, life insurance, personal possessions, and so on. Some estates are large; some are small. The size of the estate doesn’t matter because there’s one universal truth regarding all of them: You can’t take it with you when you die.
Only two things in life are certain: death and taxes. Estate Planning will address both. A good estate plan carries out your wishes and instructions, ensuring the least amount possible is paid to taxes, legal fees, and court costs.
That is Estate Planning in a nutshell: planning in advance and naming who will receive your things after you are gone. However, there is more to the process. An Estate Plan should also:
- Include instructions for your care if you become disabled before you pass
- Name a guardian for your minor children
- Provide for loved ones who may be irresponsible with finances
- Provide for family members with special needs
- Include life insurance, disability, and long-term care insurance
- Be an ongoing process, reviewed and updated as your family and financial circumstances change over a lifetime.
People tend to only consider Estate Planning at key times during their lives. For example, at the birth of their first child, or when they retire, or upon the illness or death of a parent. The truth is, the right time to create your Estate Plan is now, before something happens.
Begin Estate Planning with a Will
A Will is a document that provides your instructions on how to distribute your property when you pass on. Not everything you own is controlled by your Will. Joint property and assets that allow you to name a beneficiary (life insurance, IRA’s, etc.) will usually transfer. A Will has to be probated upon your death, but there are ways to avoid probate, which we will discuss in a later article.
Consider Powers of Attorney, or POAs
There are several types of POA. Some allow a person to make medical decisions for you if you are unable to make them for yourself. Others let a person to make financial decisions for you under the same circumstances. POAs can be limited in the powers they authorize to your agent, or they can be rather broad, depending on your needs and wishes.
Explore the Living Will
This is sometimes called a Medical Directive or Directive to Physicians. This document is where you outline your wishes in case you become terminally ill and need to be on life support.
This is just an example of a very basic Estate Plan. You may need other documents, depending on your estate and your situation. Your plan should be personalized to include all the things you want and need. For example, you may want to include funeral and burial instructions for your loved ones to follow. Also, pay attention to the words and definitions used in your Estate Planning documents. Some of the standard definitions may not fit your situation, especially if you have a blended or non-traditional family. Be sure that general terms like “spouse,” “heirs,” and “children” are clearly defined to fit your situation and your requests.
There are plenty of do-it-yourself Estate Planning services on the internet these days, and that is certainly better than nothing. But the best way to protect yourself and your loved ones is to consult with an experienced attorney. Then, you can be certain you have addressed every possible concern and left nothing to chance.
Now that you know the basics, are you ready to get started? Give us a call at 210-368-9708 and schedule your Estate Planning consultation today!