What is Estate Planning?
Your estate is comprised of everything you own: your bank accounts, your home, life insurance, and all of your personal possessions. No matter how large or small, everyone has an estate; and it’s important to plan what will happen to these things upon your death. To insure your wishes are carried out, you need to meet with an attorney to set up an estate plan. Your estate plan should consist of the following components:
A living trust or revocable trust serves to transfer ownership of your assets into your trust. The trust is revocable, and the owner, or trustee has the power to revoke or amend the trust at any time during his or her lifetime. The trust will hold all of the personal property you now own or will acquire during your lifetime for the benefit of the beneficiary of the trust.
- Declaration of Trust: If for some reason, you neglected to transfer your assets to your trust, the Declaration of Trust confirms that you intended to include all of your assets in the trust and can potentially help to avoid probate of those assets.
- Certification of Trust: The Certification acts as a short version of the Trust Agreement in order to give a third party all necessary information required from the Trust, without disclosing confidential provisions.
- Distribution of Personal Property: Appoints beneficiaries to specific items in your possession, including digital assets if they exist.
- Will: Under the terms of the Will, any assets held by you that have not been transferred into your trust will be added to your trust at the time of your death.
- Attorney-in-Fact: A trustee may also appoint an Attorney-in-Fact (or Power of Attorney) and delegate any or all of the powers conferred upon a trustee.
- Advance Health Care Directive: An advance health care directive is a legal document, as part of your trust, and allows you to name another person to make health care decisions should you be unable to speak for yourself. It also serves to record your wishes about your health care.
- HIPAA Authorization: This document authorizes your health care providers to release information regarding your confidential medical information to the individual(s) you have specified and allows them to act on your behalf if necessary.
- Final Disposition: Allows you to decide in writing, what will happen to your remains upon your death, and allows you to appoint a representative to oversee carrying out your wishes.
A good estate plan can avoid a big mess for your loved ones after you pass; namely, avoiding probate. Your estate plan will also protect your beneficiaries, especially if they are minors, by overseeing the way in which they inherit your assets. Your attorney will help you establish a trust that will meet your specific needs and wishes.