Estate planning involves making decisions about how you want your assets and belongings to be distributed after your death. It is a process that allows you to ensure that your wishes are carried out, minimize taxes, and provide for your loved ones. Here are some estate planning basics to consider:
Will: A Will (also known as a Last Will and Testament) is a legal document that outlines how you want to distribute your assets upon your death. It allows you to name beneficiaries, appoint a Personal Representative (aka executor) to manage your estate, and designate guardians for minor children, if applicable.
Trusts: A trust is a legal arrangement that holds your assets for the benefit of others. There are different types of trusts, such as testamentary trust, revocable living trusts and irrevocable trusts, each with its own purposes and benefits. Trusts can provide for the management and distribution of assets while avoiding probate, minimizing estate taxes, and protecting assets.
Beneficiary Designations: A beneficiary is an individual who receives property left to them by the deceased. Many assets, such as life insurance policies, retirement accounts, and investment accounts, allow you to name beneficiaries. It’s important to regularly review and update these designations to ensure they align with your current wishes.
Power of Attorney: A power of attorney is a legal document that appoints someone to act on your behalf if you become incapacitated or unable to make decisions. There are different types of powers of attorney, including financial and healthcare powers of attorney.
Healthcare Directives: Healthcare directives, such as a living will or a healthcare power of attorney, allow you to specify your medical treatment preferences and appoint someone to make healthcare decisions on your behalf if you are unable to do so.
Guardianship: If you have minor children, it’s essential to name a guardian who will take care of them if you pass away. Discuss this decision with the chosen guardian to ensure their willingness and ability to fulfill this role.
It’s important to regularly review and update your estate plan, especially after major life events such as births, deaths, marriages, divorces, or changes in financial circumstances. Regular updates ensure that your plan remains relevant and reflects your current wishes.
Consider these Estate Planning Basics and consult with an experienced estate planning attorney at Jacobson Family Law who can guide you through the process and ensure that your estate plan is legally valid and tailored to your specific needs and objectives. Call 443-741-1147 or schedule a consultation today.