Protect Your Assets: The Basics of Estate Planning

by Gina Blitstein · 1 comment

Few people relish the idea of estate planning, that is, drawing up documents to ensure that their wishes are carried out upon their incapacitation or death. Those wishes can relate to the distribution of possessions and wealth as well as to decisions regarding medical care. Not only does the process bring up the emotion-laden issue of one’s mortality but it also shines a bright light on private and rarely-discussed issues like finances and family relationships. While the process of planning and setting things forth in a formal – and legal – way is an emotionally arduous task, it’s vital to ensuring that one’s wishes are carried out and that your family won’t be burdened at an emotional time with difficult decisions.

Estate planning basics

These documents will ensure that your wishes are carried out:

Will

Wikipedia defines a will as, “a legal declaration by which a person names one or more persons to manage his or her estate and provides for the distribution of his property at death.” Although commonly drawn up by attorneys, one can make one’s own will, so long as basic guidelines are followed. There are software programs that can assist you in making your own will if you determine an attorney to be unnecessary.

According to Wikipedia, only 30% – 50% of Americans die having made a will. Without a will, a person’s assets are distributed by the state which may divvy things up far differently than the deceased would have wished. Furthermore, even sentimental possessions are left to be distributed by grieving family members who will be further traumatized by the task of determining “who gets what.”

Living Trust

LegalZoom.com explains that a living trust is a legal arrangement in which you transfer title to your property from your name to that of a trustee, who can then manage your property. Since you will probably be your trust’s initial trustee, you will still be in charge of your property. A living trust allows for easy organization and management of your assets as well as for an efficient property distribution when you die.

Living Will

In the event you suffer from a terminal illness or lapse into a permanent vegetative state, a living will indicates which life-sustaining treatments you do or do not want applied to you. Should you become incapacitated and unable to communicate them, this document stipulates your wishes so that your instructions regarding your medical care can be known and acted upon accordingly.

Durable Powers of Attorney

A durable power of attorney is a document in which you name a person you authorize to make decisions on your behalf, should you be unable to do so. The word “durable” refers to the fact that that is immediately and continuously in force until revoked or upon your death.

Durable powers of attorney can pertain to financial or medical circumstances. Financial power of attorney enables your agent to handle, access and manage your finances. Medical power of attorney enables your agent to make medical decisions on your behalf, should you become incapacitated.

Make certain that these documents are prepared completely and properly and witnessed and/or notarized as is legally appropriate in your state. Keep the documents in a safe deposit box and inform your will’s executor where and how to access these important papers.

These are the basics of estate management to provide an overview of the decisions that need to be made and the documents that need to be prepared to ensure that your wishes are carried out and that your family’s financial – and emotional – welfare is protected.

Have you done your estate planning?

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{ 1 comment… read it below or add one }

Evan Guthrie January 3, 2014 at 3:29 pm

Good basics of estate planning. A durable power of attorney is invaluable in case of incapacity.

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