The Who, What, and Why of Estate Planning
What Is Estate Planning?
Estate planning is the process of ensuring that your assets, well-being, and affairs are managed and distributed according to your wishes in the event of your incapacity or death.
Who Should Have an Estate Plan?
Everyone benefits from estate planning—not just the wealthy or the elderly.
By preparing an estate plan, you ensure that after your death, your wishes are carried out and that you and your loved ones, including your minor children, are cared for by individuals that you trust.
A thoughtful estate plan will also ensure a more orderly and predictable administration process for your loved ones. Prior estate planning can minimize family disputes, potentially avoid the costly and prolonged probate process, and safeguard beneficiaries’ interest in your assets from creditors, lawsuits, or mismanagement.
Why Should I Have an Estate Plan?
Without estate planning, decisions related to your assets, well-being, and affairs will be determined by courts and the law. A court, for example, might decide who becomes guardian over your minor children or who will manage your medical care if you cannot manage it yourself. The law will dictate who receives your assets, even if it is someone you have not spoken to in years.
Estate planning also alleviates some of the burden associated with administering your estate. A proper estate plan can simplify the administration process, avoid disagreements and costly litigation, provide for minor children and protect vulnerable beneficiaries.
What Documents Are Needed for Estate Planning?
While every estate plan is different, the following is a list of some common estate planning documents:
Last will and testament. This document allows you to outline who you would like to manage your affairs after your death and how and to whom you want your possessions distributed after your death.
Trust. The are many types of trusts used in estate planning. The most common is a revocable trust. A revocable trust is a living trust that includes provisions that the trust can be amended or revoked by the creator. The creator funds it with assets to pass on to beneficiaries. Trusts can be beneficial for individuals who want to avoid probate for their heirs, protect any minor heirs, retain a greater degree of control over their assets after their death, or who own property in multiple states.
Durable Financial Power of Attorney. This document names the individuals that you authorize to make and carry out financial decisions on your behalf during your lifetime.
Advance Directive. This document names the individuals that you authorize to make medical decisions on your behalf if a medical provider determines that you do not have the capacity to make such decisions yourself.
Living will. This document accompanies your advance directive and communicates your wishes to health care provides regardinghow you want to be treated if you cannot make your own decisions.
Beneficiary forms. Many assets, such as life insurance, IRAs and 401(k) plans allow you to name one or more beneficiaries and one or more contingent beneficiaries. This allows these assets to avoid probate and to be paid directly to your loved one or your trust.
Contact Us
If you’re interested in scheduling a consultation with Attorney Lahey or another estate planning attorney, please call Normandin, Cheney & O’Neil, PLLC at 603-524-4380 or click here.