If you are going through life without an estate plan, you are shirking a basic responsibility. It can seem as though the matter is only relevant to senior citizens, but people of all ages do pass away unexpectedly each and every day.
When you have an estate plan, you are protecting the interests of those that you love. If you have a young family, you have a great deal of responsibility. Parents with minor children in the home should certainly take action to put a plan place.
In this post we will look at the components of a basic estate plan.
Transferring Financial Assets
Regardless of your age or financial status, you must facilitate future asset transfers when you create an estate plan. This can be accomplished through the creation of a last will.
In some cases, a simple last will can be perfectly suitable, but there are other options to consider. When you use a will to transfer your assets, the will must be admitted to probate. This is a legal process that can be time-consuming, and there are expenses that go along with the probate process as well.
It is possible to facilitate asset transfers outside of probate. One popular probate avoidance tool is the revocable living trust.
With these trusts you do not surrender control of the assets while you are living. You can act as the trustee and the beneficiary initially, but you name successors to assume these roles after you die.
The successor trustee that you choose will distribute resources to the successor beneficiaries after your death, and these distributions would not be subject to the probate process.
Nominating a Guardian for Minor Children
When you are creating an estate plan, you can nominate a guardian to care for your minor children. You should certainly take this step if you have dependents.
There is also the matter of incapacity planning. Many people become unable to communicate toward the end of their lives. You can name decision-makers to act on your behalf in the event of your incapacitation through the creation of legally binding documents called durable powers of attorney.
You could create a durable power of attorney for health care and name a medical decision-maker. For financial decision-making, you could create a durable financial power of attorney.
Revocable living trusts are also useful for incapacity planning purposes. If you have a revocable living trust, the successor trustee that you name could be empowered to administer the trust in the event of your incapacitation.
Your estate plan should also include a living will. This document is used to express your preferences with regard to the utilization of life-sustaining measures like feeding tubes, artificial hydration, and mechanical respiration.
Free Estate Planning Consultation
Some people do not take action because they do not know where to begin. If you feel this way, our firm can help. We offer free estate planning consultations to people in and around Oklahoma City and Overland Park, Kansas. To request an appointment, send us a message through our contact page.
Parman & Easterday