When you enter uncharted waters to take on a responsibility that is not in your wheelhouse, you should break it down into its simplest parts. This applies to estate planning, and we are going to look at the five essential estate planning documents in this post.
A Will or a Trust
The facilitation of postmortem asset transfers will be the first order of business. You can state your wishes in a simple will or utilize a trust of some kind.
There are some limitations and drawbacks that go along with the utilization of a will, and one of them is the waiting game. When a will is used, the inheritors do not receive their bequests until the estate has been probated by the court, and it will take more than six months.
This is not the only drawback of probate. Expenses shave down the value of the estate before it is distributed to the heirs, and the general public can access the records, so there is a loss of privacy.
When assets are transferred through the terms of a will, lump sum inheritances are distributed all at once. This can be less than ideal if you leave assets to someone who is not a good money manager.
If you use a living trust instead of a will, these drawbacks and limitations vanish. The distributions are not subject to probate, and you can instruct the trustee to distribute limited assets over an extended period of time. They would also be protected from the beneficiary’s creditors.
This is just one of the numerous different trusts that can be utilized to satisfy various objectives. When you work with our firm to develop your plan, we will gain an understanding of your situation and apprise you of your options.
Every estate plan should include a living will. This document is used to express your choices regarding the use of feeding tubes, artificial hydration, resuscitation, and other life-support methods.
You can add your organ and tissue donation designations if you choose to do so, and you can include your comfort care medication preferences.
Durable Powers of Attorney
The living will would be exclusively focused on life-support choices, but other situations can arise when you are unable to communicate. To account for this possibility, you can name an agent to make decisions on your behalf in a durable power of attorney for health care.
Physical medical problems can cause incapacitation, and cognitive impairment is another threat. People with dementia become unable to handle their own financial affairs, so you should also have a durable power of attorney for property.
It should be noted that you would act as the trustee while you are alive and well if you have a living trust. When you establish the trust, you can name a disability trustee to assume the role in the event of your incapacity.
Back in 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted. A provision contained within this measure prohibits doctors from sharing medical information with anyone but the patient.
You should add a HIPAA release to give your health care representative the freedom to access all relevant information. If you want others to be able to speak freely with your doctors, you can grant the permission to any number of people.
Access Our Free Worksheet!
We have prepared an estate planning worksheet that you can go through to gain a more thorough understanding of the process. It is being offered free of charge, and you can head over to our worksheet access page to get your copy.
Need Help Now?
If you have been thinking about working with an Oakdale, MN estate planning attorney to put a plan in place, there is no time like the present. You can send us a message to request a consultation appointment, and we can be reached by phone at 651-478-8999.