Nobody wants to think about the fact that they’ll die one day, but a responsible guy considers how his family and friends will suffer after he’s gone. You want them to properly mourn your passing, not spend the entire time trying to figure out your chaotic finances. When you plan for your death, you’re performing a loving act for your family as well as one that lets you retain control even after death. You don’t need to have an estate to do your estate planning. You don’t even need to have tons of assets for wills and estate planning. You don’t have to wait until you’re getting older than you are. In fact, you should start thinking about getting estate planning in order as early as in your 30s.
What is Basic Estate Planning?
At its simplest, estate planning is a set of legal documents that help your family make decisions for you based on your desires in life. For example, if there’s been an accident, you may not wish to remain on life support. These medical decisions can be dictated into legal documents for your family to follow. While you might not have a fortune to worry about, you could have some sentimental gifts you’d like to give to others when you pass. The binding documents will detail your medical, financial and legal choices to be implemented during a crisis.
Considerations When Gathering Information
Before you can make these decisions, you should sit down and really ponder some basic questions. If you are unable to make your own decisions, do you have someone you trust to do that for you? This person should be willing to follow your directions even if they don’t necessarily agree with them. You don’t want to appoint your parents to pull the plug on life support if you know they’ll struggle and fight against it.
A father will want someone to take care of his children after death. Even if you’re married, you should both have documents detailing who will become the guardian of the children. If you pass together, this could become a problem when there are two wills with different guardians. When you’re in the planning stages, it’s vital to discuss this with others too. Find out who will take your children. Talk to your parents about whether they’d pull the plug on life support if you were in a coma. This kind of decision can’t be sprung unexpectedly on loved ones.
Life insurance beneficiaries should be detailed in the legal documents too. While the policy will list the person, you’ll want to be thorough in how you’d like that money distributed.
Estate Planning Terms
If you’ve been a bit confused about the terms that are tossed around in estate planning, this should help.
This is the entirety of your legal documents and decisions. It’s what’s used to define your wishes after a medical crisis or death.
Testate or Intestate
When someone dies with a will, they are said to have died testate. The opposite is true of intestate, which means they don’t have a will. The state will decide what happens to your assets.
This is the legal process of settling the estate, which can involve the court system.
Executor or Administrator
The person who is responsible for settling your estate is the executor or administrator of your estate. That person will carry out your wishes after death.
The money and assets you’ve accumulated can be placed with a third party for an express purpose. You might need to have someone take care of a child’s needs before they’re old enough to be given the assets.
Documents and Choices
These are the basic documents you’ll need to consider when you’re planning your estate. Many of these choices will require professional help from an estate planning lawyer especially if you have complicated finances.
This is the document that details the way you’d like your assets distributed after death. If you’d like your brother to get all your baseball cards, this is where you’ll list them. The will is filed with the court after your death, and the proper procedures are followed.
Many people wonder “How do I make a living will?” and it’s not that difficult. You’ll need to consider what you’d like to happen in the event that you’re not able to make medical decisions for yourself. When there’s no hope of recovery, would you like to remain on life support? You might wish to be an organ donor, and a living will details all those health care decisions prior to you being incapacitated.
This person can be called something different in each state, but basically, it’s the person who will make all your medical decisions when you can’t.
Power of Attorney
This document will give financial power to someone you’ve listed on it. It’s much like the health surrogate except this person makes legal and financial decisions when you can’t make them.
DIY Estate Planning: Is it Right for You?
This is a personal decision. Some details are easy for you to do yourself. Things like making a living will can be a bit more complicated, but you have to decide for yourself how you’d like to proceed. A complicated financial history, purposely leaving a person out of your will or multiple properties can be confusing if you’re doing your own estate planning. Make a will online if you have a few assets that you’d like given to specific individuals. Otherwise, it’s best to get advice from a professional.
When you’ve gotten divorced, remarried or had a child, you will want to update your documents to include or remove someone from your will. This estate planning guide should have answered some basic questions regarding the process. You should consult with a professional when you have complicated finances or need extra help.
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