• Establishing a will or trust ensures that your wishes and the interests of your descendants are protected after death.
• Creating a living will and appointing someone as power of attorney can provide further assurance for medical and financial decisions.
• Consulting with a probate lawyer and setting up beneficiary designations can help ensure that your wishes are followed.
• Setting up a power of attorney and health care proxy ensures that the estate owner’s wishes make medical decisions.
Death is one of the most difficult conversations you must have with your family. It’s especially hard when you consider that, after you’re gone, your wishes and the interests of your descendants may not be adequately protected. However, it is possible to ensure that your estate is taken care of—so that your loved ones are taken care of—if you plan.
Setting up a Will or Trust
The best way to ensure that your wishes and the interests of your descendants are protected after you die is to create a will or trust. A will is a legal document that outlines how you wish for your assets to be distributed upon death, while a trust can protect those assets in case something happens to you before they are distributed. Both documents can also include instructions on how you want any minor children cared for in the event of your death.
Depending on the state where you live, there may be certain limitations on what you can accomplish through either document. For example, you may not be able to protect some assets or designate a guardian for your minor children. To get you started, here are ways to help protect your estate:
Create a Living Will and Power of Attorney
In addition to setting up a will or trust, you should create a living will and designate someone as your power of attorney. A living will outlines the type of medical care you would like to receive if you cannot make decisions on your own. You can bestow authority to an individual of your choosing by establishing a durable power of attorney, thus allowing them to make financial and medical decisions on your behalf if you are no longer able.
Get a Probate Lawyer
It is also important to enlist the help of a probate lawyer. A probate lawyer can help ensure that your assets are transferred according to your wishes, as outlined in your will or trust. They can also advise on estate taxes and other legal matters related to the distribution of your estate. An experienced attorney handling such matters can help ensure that your loved ones are taken care of the way you intended.
Another way to ensure that your wishes and the interests of your descendants are protected is by setting up beneficiary designations on all accounts and insurance policies. This allows you to designate who will receive these funds if something happens to you before they are distributed following your will or trust.
Ensure all beneficiary designations are reviewed every year or whenever life events occur, such as marriage, divorce, birth/adoption, etc., and always update them accordingly. Here are the types of accounts that should be reviewed:
Benefits of Designating a Beneficiary
Designating a beneficiary on your accounts can provide several benefits:
- It ensures that your assets are distributed according to your wishes and not following state laws.
- It can help avoid probate costs and delays since no court proceedings are required to transfer funds.
- Designating a beneficiary allows you to take advantage of tax benefits and other incentives offered by some financial institutions.
Health Care Proxy
Estate owners must set up health care proxies (HCP). An HCP similarly grants authority over medical decisions if someone becomes incapacitated; this authorization must come from an individual the estate owner trusts completely and understands their wishes regarding medical decisions should something happen.
How to Set Up an HCP
Setting up a health care proxy is similar to setting up a POA, although there are some important differences. The estate owner must consult with their doctor or healthcare provider and provide information on their medical history and any particular wishes they have regarding end-of-life decisions. Also, the HCP must be signed by the estate owner and their healthcare provider and kept safe.
Ultimately, estate planning is about more than just money; it provides peace of mind for those left behind. So, talk to your family and ensure you have a plan, so everyone is taken care of after you’re gone. Proper planning lets your family know that their interests and wishes will be respected even after you are gone.