Save your loved ones the headache and heartache
Death is something that most people don’t like to think about, but a reality. You never know when it will happen. Similarly, illnesses happen unexpectedly every day.
Would you be prepared today for any of those unfortunate events?
Your estate is everything you own. You want to have estate plan documents to be sure your assets and wishes are carried out in the way you would like. If you are over eighteen, you should consider having an estate plan.
These four must-have documents will make it easier on your family, if any of these situations arise.
- Last Will and Testament – a will is your voice at time of death. It provides specific directions about how you wish your estate to be divided, and how minor children and pets will be taken care of, if you have them. In your will, you designate someone as your executor. That person will pay your outstanding liabilities and distribute the remaining assets to your beneficiaries based on your wishes.If you die without a will, the probate court will decide how to divide your assets based on the state’s laws. A probate court deals with the property and debts of a person who has died. If you have properties in different states, all of those states will have a hand in making the decision which could make it drag on for many months or years. If your minor children’s other biological parent is not alive, the state will decide their fate including how their inheritance will be distributed.
The bottom line is that if your estate goes into probate, the results may be very different from what you would have intended. It is therefore in your best interest to avoid these unnecessary headaches for your family
- Revocable Living Trust – this is another tool used for transferring wealth to others without expense and hassle. It can be used while you are alive, if you are incapacitated, and after you die. You also have the flexibility to make amendments as your life situation changes. Your designated trustee can distribute your property. Having a living trust can help you avoid probate.
- Advanced Medical Directive – these are legal documents which provide direction about your care in the instance that you are in a coma, mentally incapacitated, terminally ill, or otherwise unable to make a decision.
Living Will – generally states a person’s wishes for end of life medical care. This is only used when the person is unable to make their own decision. The types of instruction would include but are not limited to: “do not resuscitate”, medical ventilation, tube feeding, etc.
Durable Power of Attorney – authorizes someone to handle matters such as finance and healthcare. It lasts only as long as you are incapable of making decisions for yourself, and will generally expire after you die or if you and your agent decides to terminate it.
Rules will vary by jurisdictions. Since all your wishes cannot be condensed into a document, it is a good idea to let your family know, in more detail, the type of care you would like so that they can make the right decision on your behalf.
Lastly, keep a list of all your assets and liabilities in your safe, or share it with someone you trust. Items to consider including are your bank account information, retirement plans, insurance policies, and any other important document. Also, ensure that you have a designated beneficiary on all your assets, including your bank account.
Avoid the headache, heartache, and unnecessary future costs to your family, and get it done.
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Tanya Taylor, CPA, MBA is the founder and CEO of Grow Your Wealth. Her mission is to help professionals and business owners ditch bad debt and create a 6 or 7-figure retirement income by learning how money works in 6 steps so that they can build a legacy without feeling stuck.