Do you own property and have a family? Great, this article is for you! If you own property and have a family, you will need estate planning at some point in the future. So just what is “estate planning?” Estate planning is the process of arranging for the management and disposal of a person’s assets upon incapacitation or death. Estate planning has many benefits that exceed the cost it takes to have estate planning done. The benefits of proper estate planning include:
- Allow your loved ones to immediately inherit your assets without the need for a lengthy and expensive court process called “probate”;
- Relieve your loved ones of the burden and divisiveness of litigating who gets what;
- Ensures your property goes to who you want rather than having state statutes determine where your property goes;
- Provide future funding for an incapacitated loved one, whether it’s old age of a spouse or a mental disability of a child;
- Help fund a grandchild’s college, or provide money to charity, even after your passing;
- Provide proper tax planning.
So what’s included in a typical estate plan?
An estate plan usually includes:
- A power of attorney that allows your agent (usually a spouse or child) to act on your behalf if needed to, for example, pay bills, deal with financial institutions, or request personal information.
- A health care power of attorney that allows your agent (usually the same person who has power of attorney) to make decision concerning your health care should you be unable to make your own decisions. A health care power of attorney also includes an advanced directive (also called a “living will”) that states your end-of-life health care wishes (for example, use of CPR, ventilation, and other life-preserving measures).
- A will that names your “personal representative” (the person who handles your assets upon death—sometimes called an “executor”) and states your wishes of who is to receive your assets upon death.
- A tangible personal property list that accompanies your will. The tangible personal property list is a document where you write down personal property items of importance and who is to receive these items (items like cars, jewelry, heirlooms, etc.). The beauty of the tangible personal property list is the ease of using it. With a tangible personal property list, there is no need to update your will every time you accumulate more personal items or if you change your mind on who gets what items—all you have to do is make a simple change on your tangible personal property list and keep it with your will.
- A transfer on death deed that automatically transfers title to your home, vacation home, or investment and rental property upon your death. Real property is usually what necessitates a probate process in court, but with a recorded transfer on death deed, your home will transfer automatically to your loved ones.
In some instances, a revocable trust that allows for you to provide for loved ones, often in incremental payments over the course of years, after your death.
Estate Planning 101: Wrap Up
We hope you’ve found this estate planning 101 guide helpful. Please feel free to reach out if you have questions or would like help with your estate planning, we would be honored to help!