Estate Planning
Mental in-cognizance and death are two subjects that many people avoid discussing with their loved ones either because they do not want to upset or bother their children, grandchildren, friends, or other relatives or they are uncomfortable discussing it themselves. However, by not discussing their wishes with others or by not creating an estate plan, loved ones, all too often, must deal with complex issues and difficult decisions.
By definition, estate planning is a process designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives. But what estate planning means to you specifically depends on who you are. Your age, health, wealth, lifestyle, life stage, goals, and many other factors determine you particular estate planning needs.
If you care about what happens to your money, home, and other property after you die, you need to do some estate planning. Estate planning can be a complicated process based on a person’s goals and objectives, and there are many tools you can use to help you achieve your estate planning goals.
To create an estate plan, you need to have at least a working knowledge of the basic estate planning tools that are available, such as:
- Will – A will is a written directive that includes instructions about who is to settle the estate (the executor), how property is to be distributed to the heirs, and perhaps most importantly, who will raise the children. Dying without a will means that a probate court will distribute the estate, which might result in family problems and lawsuits.
- Statutory Durable Power of Attorney – This names family members or other trusted individuals to make financial decisions or transact business on behalf of the person executing the Statutory Durable Power of Attorney
- Health-Care Power of Attorney – These are instructions about the medical care that would be wanted if conditions were such that the patient couldn’t express his or her own wishes.
- Living Will (also known as Directives to Physicians) – Is a document that outlines your preferences in regard to what life-saving measures medical staff and first-responders are allowed to perform on you to save or prolong your life. It also states what end-of-life pain management and comfort measures you want to be administered during the closing phase of your life. Without this document in place the responsibility of these tough decisions can fall onto loved ones.
- HIPAA Authorization – This authorizes your health care provider to share your protected medical information with your health care agent (could be spouse, children, etc) as required under the Health Insurance Portability and Accountability Act (HIPAA), which is a Federal law that required the establishment of national standards to protect the privacy of patients’ health care information.
- Trust – A trust is a legal entity where someone, known as the grantor, arranges with another person, known as the trustee, to hold property for the benefit of a third party, known as the beneficiary. The grantor names the beneficiary and trustee, and establishes the rules the trustee must follow in a document called a trust agreement. The trust could be a living trust or an irrevocable life insurance trust (or ILIT).
A will is probably the most vital and the most commonly known. Even if you’re young or your estate is modest, you should always have a legally valid and up-to-date will. This is especially important if you have minor children, because in many states, your will is the only legal way you can name a guardian for them.
Source: Broadridge Investor Communication Solutions, Inc.
(Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield clains no liability for any modifications to its content and/or information provided by other sources)