Estate planning is an important step in protecting your loved ones.
Estate planning is more than merely having a piece of paper to submit to the probate courts upon your death.
It involves strategizing, organizing, and comprehensive planning.
According to a recent Investopedia article titled “6 Estate Planning Must-Haves,” there are specific items you should include in your estate plan to best prepare for the inevitable.
What are they?
A will is foundational to any estate plan.
It allows you to instruct the probate courts regarding who receives what from your assets.
What happens if you do not have one?
The laws of the state may determine who gets your things, if you do not have a surviving joint owner or beneficiary designated.
Trusts are another layer to asset distribution and protection.
They are often included to help reduce taxes or legal complications.
In my experience, trusts are a great way to protect the inheritance "from" heirs and protect it "for" heirs when prudent.
After all an inheritance should be a blessing and not a curse.
In any event, neither your will nor your trust should be a DIY project.
Rather, you should work with an experienced attorney to ensure that the legal language actually aligns with your wishes.
Durable Power Of Attorney
A durable power of attorney addresses the issue of what happens should you become incapacitated and unable to handle your own affairs.
Using a durable power of attorney, you can choose an agent to act on your behalf.
The power of attorney can be revoked at a specific time set by you or at any time you choose.
When might it be revoked?
This could be only when you, the principal, have been deemed physically or mentally able to act on your own behalf.
This is known as a "springing" power of attorney. I really do not prefer this approach.
I mean, if you trust someone to act when you do not know what is going on, then why not trust them now?
Not all assets pass through probate.
Some assets are distributed directly through beneficiary designations.
What are examples?
These assets include retirement accounts, insurance policies, and certain bank accounts.
Be sure these are up-to-date.
For example, the last thing anyone wants is for their ex-spouse to receive all of your money.
Letter of Intent
A letter of intent can cover a number of subjects.
It is not a legal document, but it can help provide more specific guidance as to your specific wishes for certain assets or your funeral arrangements.
Healthcare Power of Attorney
A healthcare power of attorney allows you to select an individual to make your health care decisions should you become incapacitated.
This is an important and stressful role.
Be sure you inform the person in advance and make them aware of your views concerning specific medical treatment.
You should also select a second option should the first refuse or be unable to carry out the responsibilities.
Do you have minor children?
If yes, this is vital.
You should select a guardian with similar values to rear your child.
Discuss your decision with the desired party and get their approval.
You should also select backup guardians.
If you fail to appoint a guardian, then the court will decide who rear your child.
This could be someone you would have avoided at all costs, like crazy Uncle Eddie!
It also may mean your child could become a ward of the state.
Neither is ideal.
As you can see, estate planning is more complicated that DIY estate planning websites would suggest.
Work with an experienced estate planning attorney to create a plan to meet your specific situation and goals.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Investopedia (April 18, 2018) “6 Estate Planning Must-Haves”