Authored by Steve Howard
Reading this probably means you may be thinking about estate planning, but you now need to take the next step by actually doing it. Only about 40% of adults have a will or a trust, which means they do not have control over the distribution of their estates or end-of-life decisions. An estate plan provides peace of mind by ensuring that your wishes and preferences are known and will be followed by individuals you trust to handle your affairs.
Purpose of creating an estate plan
If you die without an estate plan, the assets owned at the time of your death will be distributed according to rules created by the legislature of your state. Intestacy laws provide for the manner of distribution of the estates of people who die without leaving a will or trust. It is a one-size-fits-all plan that may not reflect your wishes.
For example, you may have given money to help one of your children start a business with the intention of leaving larger shares of your estate to your other children. If you die without an estate plan, the child you helped receives the same amount as his or her siblings according to the laws of intestacy.
Estate planning avoids conflicts between siblings while ensuring that you maintain control over your estate. It can also do much more depending upon how comprehensive you and your estate planning attorney decided to make it.
Common estate planning documents
The documents that go into creation of an estate plan differ from one person to another depending upon what they own and the goals they wish to achieve. The documents most often used in estate planning include the following:
- Last will and testament: A will lets you name someone you trust to take charge of your estate upon your death. The executor has the authority to take control over and protect your assets, pay taxes and other debts owed by the estate, and distribute the estate according to your instructions contained in the will. A will avoids intestacy laws and the loss of control over what happens to your estate.
- Living trust: Unlike a will that does not go into effect until after your death, a living trust allows you to place all or specific assets under the control of a trustee to manage according to the terms of the trust document. A provision in a trust may provide instructions to the trustee about distribution of the assets and income of the trust to beneficiaries according to your instructions during your lifetime and upon your death.
- Durable power of attorney: Putting someone you trust in a position to handle financial affairs when you are incapacitated can be accomplished with a durable power of attorney.
- Health care directives: If you are incapacitated and unable to communicate decisions about medical care to your doctors, a health care directive makes your preferences known. A power of attorney for health care appoints someone you trust to make health care decisions, including end-of-life decisions, according to the preferences in the health care directive.
An estate planning attorney may recommend other documents to create an estate plan to accomplish your goals. For example, instead of including preferences about funeral arrangements in a will, an attorney may recommend putting them in a letter and asking a trusted friend or relative to handle them for you when the time comes. It avoids the risk of the contents of your will not being seen until days after the funeral.
What happens next?
You can make meeting with a lawyer to discuss estate planning more productive by taking the following steps ahead of time:
- Make a list of the real and personal property you own and their approximate value.
- Make notes about how you want your estate distributed after your death, including the names of beneficiaries.
- Write down the names of people you want as executors, trustees and guardians of minor children.
- Carefully consider and make note of your preferences about health care and end-of-life decisions.
Gathering this information in advance avoids the risk of leaving something out of the estate plan and makes the process easier for you and the lawyer.
Steve Howard has been writing legal-centric articles for several years now. He started working with the personal injury attorney law firm Herrig & Vogt in 2019 as the Content Marketing Manager, which has allowed him to expand on his writing in personal injury, family law, and much more. Steve strives to offer the public advice on various laws covering a variety of practices