What comes to mind when you think of drafting an estate plan? If you said creating a will or trust, you're correct, but that is only one of the many relevant aspects of an estate plan. If your goal is a seamless transition of assets to your heirs upon your death, it is vital that your estate plan include all of the following elements.
Wills and Trusts
A will or trust is the staple of any estate plan as it identifies what exactly you want to happen to your assets. While the two differ in many ways, one of the most obvious is that a will goes into effect after the individual passes while a trust takes immediate effect after it's signed. No matter which one you choose to create, legal assistance is a necessity to ensure proper wording in either document.
Designating a guardian is essential if you have or plan on having children. The individual or individuals you select should be willing to take care of your children and also be financially able to do so, especially if they have children of their own. Overlooking guardianship designation can result in your children being left in the custody of an unfavorable family member or even becoming wards of the state.
Your will may designate the passing on of your assets, but numerous assets such as 401(k) and IRA accounts are passed outside of a will. It is essential that you have a beneficiary and a contingent beneficiary for this reason. Failing to designate a beneficiary can result in a much more costly administration of the account at the death of the owner.
Durable Power of Attorney
An agent under a durable power of attorney (POA) is the individual responsible for making legal decisions on your behalf in the event you become incapacitated. The individual should be someone you trust and who shares your views and beliefs as he or she must be able to make impactful financial decisions in your absence. Couples often reciprocally assign their spouses to be each other's POA, but those who are single or have special considerations may choose to do otherwise.
Healthcare Power of Attorney
The healthcare power of attorney (HCPA) is the person who is responsible for making all health care decisions the moment you are unable to do so yourself. As with a POA, the HCPA should be someone you can identify with on many levels as he or she may be responsible for making actual life or death decisions.
Letter of Intent
Your letter of intent is left for your beneficiary and addresses what you would like done with particular assets when you die or become incapacitated. Individuals often also include how they want to be buried and many other specific requests in their letter of intent. Although the law does not recognize such a document, it can provide clarity for the probate judge in the unfortunate instance that there are issues with the validity of your will.
Your estate plan will have a lasting effect long after you're gone, which is why it is essential to secure legal guidance when drafting it. The team of estate planning attorneys at Heritage Law Office of Wisconsin the experience necessary to assist you with constructing an estate plan, long-term care, Medicaid benefits planning, and much more. Contact us today at 414-253-8500 for a free case evaluation.