Estate Planning has always been effective in sorting out the disputes of transfer and distribution of assets. The primary goal of an estate plan is to make sure that the beneficiaries and heirs receive assets and finances with maximum tax exemptions.
There are countless factors to contemplate having an estate plan; therefore, it is highly advisable to engage the services of a competent wills and estates lawyer for a trouble-free distribution of assets after one’s demise or incapacitation.
What Four Basics To Consider When Making An Estate Plan?
Many people are under the impression that estate planning simply means drafting a will or trust. However, there is a variety of medical and financial data that estate planning encompasses. Here are a few handfuls of things that one must consider for good estate planning:
- Wills and Living Trusts A Will or Trust is one of the most essential components of comprehensive estate planning. Wills map out how your assets will be distributed among your beneficiaries. Not only it administers the distribution of assets, but it also spells out:
- Who will take care of your children and other dependents?
- How your children’s property will be handled until they reach the age of majority?
- How your business affairs will be managed?
It is prudent to always name the persons on your will who are going to inherit your assets. Unlike a will, a trust is a three-party agreement where a trustee is appointed. The designated trustee is authorized to manage and distribute your assets and finances to your beneficiaries.
Depending on individual circumstances, some might choose to create a living trust. The primary reason behind the selection of living trusts by many people is that it circumvents the probate procedure. In simple terms, probate is the formal court procedure where the court looks after the distribution of the decedent’s assets to the beneficiaries.
It is pertinent to note that a trustee can take over in the event of any disability or incapacitation. In contrast, the persons listed on the will for the management of your assets or taking care of your children cannot step in if you become incapacitated.
- Financial and Durable Power of Attorney (POA)
POA is your designated agent who acts on your behalf for the administration of your financial and legal matters. A financial Power of Attorney (POA) is a legal document that manages your finances. The role of a durable Power of Attorney (POA) can be significant when you cannot manage your finances.
That is to say; POA gives your agent similar powers as if he/she was you. POA is planned for the event of incapacity, i.e. physical disability or mental incompetency, to transact the matters while you are still living. The POA can be revoked when the principal becomes able or competent to look after his or her financial and business affairs. In case POA is absent due to reasons such as being physically or mentally incompetent, then the court may end up appointing an agent in such a case.
- Beneficiary Designations
A beneficiary designation is an act of entitling a person as a recipient of money, property, or other investments. The beneficiary designations are named when you have established retirement plans or insurance policies. Contingent beneficiaries must be maintained on such accounts or plans in case the primary beneficiary passes away.
It is crucial to name beneficiaries because wills and trusts do not deal with the management of assets that are supposed to be dispersed through beneficiary designations.
- Advance Directives
Considering advanced directives can be a plus point in making a decent estate plan. These advanced directives include Health Care Power of Attorney or Medical Power of Attorney. These directives assign instruction when you cannot make decisions on your own.
Our Estate Lawyers Can Guide You!
Estate Planning is not legally necessary, but a well-established estate plan can inevitably fade away a great deal of fuss. The attorneys at Ayaz Mehdi Professional Corporation are available to provide up-to-date legal assistance in estate planning matters within the parameters of governing laws.
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