When most think of an estate plan, they typically consider it something that is only for the wealthy, but that couldn’t be further from the truth. An estate plan is an important part of any individual or family’s financial security. It determines how your assets will be distributed after your death and can also dictate who will handle your affairs if you are incapcitated. Understanding the components to include in an estate plan is vital to making sure your wishes are carried out properly.
Important Components to Include in an Estate Plan:
- Wills and Trusts
One essential part of an estate plan is the will, a legal document that details the distribution of your assets after your death. This includes things like property, money, and possessions. You will also want to have a trust that will allow someone else to manage your assets on your behalf. A trust can be helpful if you cannot handle your own affairs or if you want to provide for someone after your death.
- Powers of Attorney
A power of attorney is a legal document that gives someone else the authority to make decisions on your behalf. You can give someone power of attorney for financial matters, healthcare decisions, or both. Powers of attorney can be revocable, meaning you can cancel them at any time, or irrevocable, meaning they cannot be canceled. If you become incapacitated without a power of attorney in place, your family will have to go to court to get the authority to make decisions on your behalf. You should appoint someone you trust to act on your behalf, and you should review your power of attorney regularly to make sure it still meets your needs.
- Healthcare Directives
A healthcare directive allows you to specify your wishes for medical treatment if you cannot make decisions for yourself. You can use a healthcare directive to appoint a healthcare agent to be responsible for making decisions on your behalf and specify your preferences for medical treatment, including end-of-life care. If you do not have a healthcare directive in place, your family won’t know what you want and will have the make difficult decisions.
- Beneficiary Designations
Beneficiary designations determine who will receive your assets after you die. You can name individuals, charities, or even trusts as beneficiaries. It’s important to carefully consider your beneficiary choices, as they can significantly impact your estate taxes.
- Letter of Intent
A Letter of Intent spells out your wishes for your estate in the event of your death or incapacity. It can include instructions for dividing your assets, funeral arrangements, and any medical directives you may have. While it is not legally binding, a Letter of Intent provides valuable guidance to your loved ones during a difficult time.
Why You Need an Estate Planning Attorney
Creating an estate plan requires a lot of legal paperwork, and when it comes to your assets, you don’t want to leave anything to chance. Our attorneys at Lonich Patton Ehrlich Policastri will work with you to create a solid estate plan that will give you peace of mind.
If you live in San Jose or the greater Bay Area, contact us for a free consultation by calling (408) 533-0801.