Following our death, our assets will be disbursed between those who we designate in our estate plan. No matter how much or how little the estate plan contains, the fact that you have one says a lot. Along with an estate plan, there are some important estate planning tools that you should know about.
The Last Will and Testament
A last will is an estate planning tool that is used often and is the will that oversees all previous wills that were written.
When you want flexibility, then a last will is needed and could involve the need for legal verbiage for validity purposes. Other than the will naming inheritors, it also can have executor’s listed to oversee estate distribution after you die and those designated as child guardians.
To be legally binding, the last will requires a signature that is witnessed, notarized, and dated. Sometimes, the last will does not require any witness or notarization when a testator completes the entire writing themselves and is provable. The individual’s sound mind must also be proven when a will is written.
The Living Will
A living will is popularly used for times where health decisions need to be made. This is also known as an advanced directive. This will permits healthcare professionals to honor the wishes when a patient is incapacitated. In basic terms, the purpose of the living will is to officially declare whether you wish to have medical intervention in the event that your health declines.
The Power of Attorney (POA)
When a power of attorney is created, it designates others as the decision maker, but with limitations. For a durable financial power of attorney, you are designating an individual to be financially responsible when you are unable to make your needs known. The power of attorney for healthcare designates who your doctor should talk to when you become unresponsive or incapacitated and medical decisions are needed.
The Irrevocable Trust
Having an irrevocable trust is able to have more protection for assets than a regular revocable living trust. It can also decrease the amount of taxes against the estate. The irrevocable trust helps you to guard assets until a designated time (death), which will then be disbursed. This can oftentimes include an insurance policy.
Conclusion
When you have an estate plan in place, you need to be able to have some tools available for planning purposes. With the most popular ones listed above, you will be converted. To get started with your planning, give us a call today.