Estate planning is a topic most people tend to avoid. Creating a will, trust, and other vital end of life documents often seems complex, cumbersome, and overwhelming. Further, the task requires turning to unpleasant thoughts such as death and the distribution of one’s assets. The perceived ugliness involved in estate planning leads to continual procrastination on implementing any estate planning strategies. One survey recently conducted by the U.S. Trust found that nearly 30% of all those involved in the study did not have any kind of estate plan.
Though creating an estate plan can involve some time and consideration as to difficult subjects, it is absolutely vital in furtherance of your legacy. Without an estate plan, the pain your loved ones will already experience upon your death will be further rocked by the upheaval of their financial life. The following is the first part of our list of essential estate planning strategies. While these plans are applicable to all generations, they are of particular magnitude to the aging baby boomer generation.
1. Create a trust or a will—this is often the first and most important step in estate planning. While it may seem obvious to draft a will, a shocking number of Americans fail to do so before it is too late. A will dictates who will receive your assets upon your death. It can also set out your wishes for guardianship over your minor children in the event both you and your spouse perish. It is important to remember, however, that a will does not avoid probate. Your last testament will go through the probate process, but generally the timeframe will be far shorter than for those who die intestate, or without a will. In addition to or instead of a will, you can set up a trust. There are a multitude of different types of trusts, and a qualified estate planning attorney can advise you on the one best suited to your needs. One of the most popular and easiest to create is a revocable living trust. This trust allows your assets to avoid the costly, time-consuming probate process. It will also follow you across state lines, making it ideal for those who own property in multiple states. Whichever you chose, the important thing is that you create a will or trust today. In the absence of these crucially important documents, disposition of your hard-earned assets will be done according strictly to state law, which can lead to undesirable outcomes.
2. Create a durable power of attorney—in addition to preparing for your eventual death, it is essential to anticipate the possibility you may become incapacitated and unable to make critical decisions as to your finances. A durable power of attorney allows you to select someone who you trust to manage your assets in the event of your physical or mental incapacity. Most often, an adult child is selected, but the decision is yours to make.
3. Create a durable health care power of attorney—related to a general power of attorney, a health care power of attorney enables a trusted family member or friend to make medical decisions on your behalf when you are unable to do so. For instance, if you were rushed into surgery and a decision had to be made as to an additional procedure, the individual authorized in your durable power of attorney would be able to issue a resolution to the doctor’s request. Your health care agent should be someone that you trust to have your best interests at heart.
At Scott Law Group, PLC, we understand the vital significance of creating an estate plan. We view estate planning as far more than just dictating who receives what when you pass away—to us, estate planning is synonymous with legacy planning. Your estate plan represents a significant piece of the overall legacy you leave behind. To this end, we vow to do all we can to help you create a lasting legacy. Call us today at (727) 754-5001 for a free consultation.