More often than not, our office works with people who have an inaccurate understanding of estate planning and the many reasons why someone should be prepared with a properly drafted plan. The biggest misconception is that estate planning is only for the wealthy. Everyone has an estate. If you own a home, car, other real estate property, bank accounts, investments, life insurance, furniture, personal belongings you have an “estate” and need a plan when you’re not able to make decisions. To ensure that your estate is protected and that your wishes are carried out, you need to provide instructions stating who you want to receive your properties, what you want them to receive, and when they are to receive it. Our law office can provide guidance on several Estate Planning tools.
The following tools are what make up an estate plan. You may want all in your plan or just one. Read along to better understand each tool and then evaluate which ones you will need to complete your estate plan and give you peace of mind.
Living (Revocable) Trusts
A revocable trust is an agreement between the person who creates the trust (you) and the person who manages the trust assets (generally you while you are alive). The trust agreement will dictate who will manage your assets when you no longer can, where your assets will go upon your death and how your beneficiaries will receive the assets. You can choose to set up sub trusts to keep your money and assets in trust until your children reach a certain age, rather than having them receive it all upon turning age 18. A properly drafted revocable trust should avoid the costly and lengthy probate process and allows your beneficiaries to receive assets much quicker. This type of trust can be changed at any time as long as the person (or people) who created the trust are alive and the trust is properly drafted to allow for changes.
Wills
A will is a document that designates who will receive your assets upon your death. It also can designate the guardian of your children. This does not allow you to avoid probate. A pour over will is a tool that is used in conjunction with your revocable trust. It is different than a standard will. A pour over will designates that all property not held in trust will pour into your trust upon your death. This type of will helps to show that you intended your property to be held in trust and can assist in avoiding probate.
Advance Health Care Directive
This document provides your doctors with instruction about what type of health decisions you would want made if you are incapacitated and unable to do it yourself. It also provides authorization to another individual to make decisions on your behalf in accordance with the instructions in the document. It generally advises your authorized individual as to whether you want to extend your life in any manner possible or how you would like to determine when they should stop medical treatment. A HIPAA release can also be added to an Advance Health Care Directive or it can be done independently.
Power of Attorney
This document provides an authorized individual with power to manage your financial affairs if you are incapacitated and can’t do it yourself.
Contact us today to determine and discuss which tools you need in your estate plan. info@alharveylaw.com OR (530) 217-3520
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