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Around half of US adults have written a will. Most of them believe that this document will ensure their affairs, and their loved ones, will be taken care of in the event something should happen to them. While a common misconception, this may be the leading reason that only 33% of US adults have an estate plan.
Many people are under the assumption that having an estate plan means nothing more than having a last will and testament. However, what most people don’t realize is that a will is just a one part of an estate plan designed only to direct the probate court on asset distribution after death. A complete estate plan includes several other documents that make provisions for handling your assets (and your health), as well as your minor dependents, both before and after you pass away. Rather than the complete plan, a will is but one component of the documents that make up your estate planning strategy. Read on to learn more!
What is a will?
A will is a legal document providing instructions to your executor and the probate court on how to manage your assets after your death. It lays out your wishes regarding beneficiaries, distribution of assets, and can even offer nominations for guardianship of minors. It also identifies who the probate court should appoint as executor of your estate. The executor is responsible for carrying out all actions laid out in your will, such as how to handle debts and distribute assets.
What is an estate plan?
Estate planning involves getting a fuller understanding of your personal and financial situation and creating a plan and structure for handling and protecting your assets, providing for your loved ones, and planning for the unforeseen to enable someone you trust to be able to handle your affairs when you cannot. While a last will and testament is a very important component of your estate plan, it is but one document and strategy needed to carry out your full estate planning goals. Every estate plan is as unique as the person creating it; however, these documents are also essential components of a complete estate plan.
Financial Power of Attorney
This document designates an agent (and successor agents, if you choose) who will be able to act on your behalf for financial matters. This document enables somebody you trust to manage your financial affairs when you cannot. This can include paying bills, preparing taxes, making real estate decisions, and managing investments.
Health Care Power of Attorney
This document appoints an agent (and successor agents) to make medical decisions on your behalf when you cannot. This document applies regardless of whether you are at the end of your life. With this document, your agent will be able to make decisions about all facets of your medical care, including procedures, diagnostic exams, medications, long-term or rehabilitation care, surgical intervention, and end-of-life care.
This document details your wishes for end-of-life medical care and overrides your Health Care Power of Attorney. If you are unable to communicate or make decisions while you are in a permanent, vegetative state or with a terminal condition, your living will will specify what medical treatments, care, life-sustaining measures, and organ donation preferences you have.
Nomination of Guardian for Minor Children
For parents with minor children, one of their biggest estate planning concerns is who will care for their children should something happen to both parents. Many people are under the assumption that a will designates the guardian for their minor children. However, in the event that a child’s parents both die or become incapacitated, the probate court will appoint a guardian to oversee their care and financial assets. Parents are able to nominate a person (or persons) to act as guardians for their minor children, which the court will consider as it decides who to appoint. Parents of minor children may also create a Power of Attorney for Minor Children, in which they name an agent to oversee their children’s medical and financial affairs in the event both parents are unable. This is often something parents do when they go on extended trips without their children.
This contract establishes a fiduciary relationship with the named trustee, who must honor the provisions in your trust for handling assets. The provisions in a living trust outline how your assets are to be managed both while you are living — hence the name, living trust — and after your death. Assets held in your trust are typically not required to be probated after your death. This enables your affairs to be handled privately, rather than publicly in probate court. This also allows parents to create a plan for how their children’s inheritance is to be handled. In many cases, parents provide for the children’s living and educational expenses and create a plan for disbursements to be made when their children reach specific ages.
Trust Pierce Legal to Craft a Complete Estate Planning Strategy
At Pierce Legal, we get to know each of our clients, gaining a meaningful understanding and relationship with you that allows us to create a thorough estate planning strategy that will satisfy all of your planning goals and needs. Our practice provides professional legal advice and guidance focused in the areas of asset protection through proper estate planning, business services, and real estate assistance. Contact us today to schedule a consultation at (330) 588-6115.