Whether your intention after you pass is to continue having your loved ones provided for, or to continue supporting a cause you believe in, estate planning may be beneficial. Many people may be intimidated by estate planning or think it is only for the incredibly wealthy, yet, this is not the case. Estate planning is simply planning for how your assets (money, property, etc.), are to be distributed upon death, as well as how end of life events, or situations where you may become incapacitated, will be handled and by whom.
While there may be many components of a successful estate plan, some key elements include: a will, a living will, a healthcare power of attorney (HCPA), and possibly a trust. These pieces may help family members and loved ones avoid uncertainty, financial hardship and potential disagreements. Each of these resources serves a different purpose, and depending on the individual circumstances, may be beneficial in helping the family at what may be a difficult time.
A will is used to outline how you want your assets dispersed when you’re gone, and the person named as the executor of the will is charged with ensuring that the terms of the will are carried out according to your wishes. To accompany a will, a living will may be created to outline how you would like medical care to be handled in the event you should become unable to communicate. A healthcare power of attorney is similar to a living will, but with a HCPA, you have the ability to designate a person to make healthcare decisions for you, in the event you can’t make them yourself. Disagreements over what should be done in end-of-life situations can create animosity between loved ones, but with these estate planning tools, the potential for misunderstandings may be mitigated.
Both a will and a trust are useful estate planning tools that can help ensure that your assets are distributed as you intended. While a will is a detailed outline describing who will receive your assets upon your passing, a trust can be created and implemented while you’re still living. Through a trust, you can outline how your assets are to be used and when the beneficiaries of the trust are to receive them. When a trust is implemented, it creates a legally binding agreement between the “grantor” of the trust- the person who creates and places assets in the trust - and the “trustee” – the person or institution that is in charge of overseeing the trust and carrying out its intentions for the benefit of one or more beneficiaries. This may be beneficial for those who may not be able to make their own decisions, such as individuals with a disability, or children of a young age.
With the help of a financial advisor, and a qualified estate planning attorney, you can learn more about how these tools may help you and your family. Do not leave your loved ones guessing about how to handle everything you have worked so hard for.
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