Planning your estate involves more than writing a simple will and naming your heirs. Many people are under the impression that estate planning is only something the wealthy need to deal with. However, whether you live in Huntsville, Alabama, or The Hamptons, if you own any property, have valuable family heirlooms, or have an investment portfolio, you can benefit from doing some estate planning.
Estate planning is one of the best ways to organize your assets, take care of your family and protect your property. When you take the time to plan out your estate, you are setting the groundwork for what will happen to everything you own after you pass on. You will have a chance to determine how you want your belongings divided and to whom.
Your estate plan will allow you to take care of your children, spouse, and other family members. You will also be able to make a plan in case you become mentally or physically incapacitated. Your estate and will can also protect your beneficiaries from having to pay additional taxes or being affected by liens or demands from creditors.
Many details need to be taken care of when you plan out your estate. It’s best to consult a professional like the best Huntsville, Alabama probate lawyer to help you draw up your documents. Let’s take a closer look at a few of the key considerations for your estate planning.
Last Will and Testament
Your last will and testament is a legal document where you can delegate how you wish your assets to be distributed to your beneficiaries after you die. The legality of this document will ensure that your wishes will be carried out as stated without opposition. However, a will can be contested in court if there is a disagreement about the content. While it is rare that a will contest will be successful in the courts, it occasionally happens.
You should list all of your assets and to whom you wish to receive them following your death. You should also outline your wishes for your funeral arrangements. Your will and testament will need to pass through the probate courts before your wishes can be completed.
Living Trusts
Unlike a will and testament where the items listed are not active until after your death, a living trust can be made and distributed while you are still living. If you have any assets that you want to protect during your lifetime, you can create a living will. Essentially, you take your assets and transfer ownership into the trust.
You will name a trustee that will manage the account. For example, if you own a second property or a classic car, you may want to add those to a living trust that will be held for your beneficiary. You will determine the requirements for payout. You may want to set a deadline like a particular age or when a beneficiary graduates from college. At that time, your living trust will be paid out to the beneficiary.
Living trusts are a great way to protect your assets, including investments, property, and life insurance policies. Living trusts are private and do not go through a probate court. This means that they can be executed right after your passing without delay. It also means that since you have essentially given up the ownership rights to a trust, your assets cannot be taxed following your death. This can save your beneficiaries money and allow them to receive their inheritance quickly.
Healthcare Directive
If there comes a time when you need extensive health care, you have an opportunity to include a directive in your estate planning. For example, if you become incapacitated by a disease like Alzheimer’s, you will be protected by the directions in your estate plan. You can mandate how you want medical decisions to be made on your behalf and who will have control of making these decisions.
When you can no longer make tough medical decisions for yourself, it is beneficial to name someone as a health proxy that you trust to take over on your behalf. This type of healthcare directive will also make it easier for medical staff to understand your wishes and know who they need to talk to about your care.
Power of Attorney
Your chosen Power of Attorney will be a trusted individual that will be responsible for acting on your behalf if you are mentally or physically unable to do so or you pass away. A power of attorney will ensure that all the aspects of your estate are delegated in the fashion in which you have outlined.
Your Power of Attorney will only be deemed to manage your business and financial affairs and cannot make medical decisions on your behalf. If you don’t assign a Power of Attorney, you will risk having the courts make all the decisions about the distribution of your estate.
One of the most important aspects of your estate planning is that it is a continual process. As your circumstances change throughout your life, your estate must be updated to reflect your current wishes.