Most people wouldn’t think about traveling somewhere new without a map. Yet 50% of Americans don’t have a will, which can leave their heirs without the proper directions to divide their possessions.
To help ensure that your estate is distributed according to your wishes, it’s important to have certain legal documents in place. A solid estate conservation strategy begins with these basic documents.
Where There’s a Will…
A good starting place is a will. This legal document will guide the probate court as it oversees the distribution of your titled property after your death. A will is also the appropriate place to name a guardian to care for your minor children and any assets they may inherit from your estate until they reach legal age.
Powers That Be
The next step is to consider whether you need to name financial and medical powers of attorney. A financial power of attorney designates someone to act on your behalf in financial matters should you become mentally incapacitated. A medical power of attorney empowers a designated person to make nonfinancial medical decisions in the event you are unable to make them yourself. Powers of attorney are valid only during your lifetime.
Fill in the Blanks
Life insurance benefits and most retirement plan assets are not subject to probate but rather convey directly to the beneficiaries named on the beneficiary account forms, regardless of what your will might say. This means it is critical to name the appropriate people. It’s also a good idea to review your beneficiary designations periodically to ensure that they still reflect your wishes.
Trusting Your Heirs
You may also want to consider whether you might benefit from a trust. Trusts are separate legal entities that hold your assets and administer them according to your wishes. Assets placed in certain types of trusts are not considered part of your taxable estate.
The use of trusts can involve a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing such strategies.
These basic estate documents can provide a useful roadmap that matches up your heirs with their share of your legacy. For help getting from point A (assets) to point B (beneficiaries), call today.
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