3 Must-Have Estate Planning Items
There’s a lot to know when it comes to estate planning, but when you get down to brass tacks, it’s not so hard to understand the essentials. Read on for 3 things every estate plan should have, and contact Bradford & Holliman for a free consultation to make sure your estate plan is where it should be!
#1: An Updated Will or Trust
Wills aren’t hard to create, but they do require that your asset distribution goes through probate. Probate is a legal process by which a deceased person’s will is validated, their property appraised and inventoried, debts and taxes paid, and the remaining property distributed as outlined in the will. Often, lots of paperwork and court appearances are involved, and any resulting fees are paid out of the estate – reducing the amount that’s passed on.
On the other hand, there are trusts. While they’re more expensive to set up at first, they can offer benefits that a will cannot. Wills are only applicable after your death; trusts function all the time, including periods of incapacity before death. They also typically avoid probate, allowing beneficiaries to access assets faster and save time and money. If it’s structured a certain way, a trust can also reduce the amount of estate taxes owed and can protect an estate from creditors.
#2: Durable Power of Attorney
If a person becomes incapacitated, they need someone else to handle financial and legal decisions on their behalf. That’s what a durable power of attorney does – although they’re not all the same. Whether it’s valid the moment it is signed or it goes into effect at a later date, the point is that it will survive your incapacity at a future point in time — which is why it’s called “durable.” If it isn’t durable, then it will be revoked when you become incapacitated – the exact moment you need it most.
Durable power of attorney should be bestowed upon someone who is trustworthy, responsible, and good with financial/legal matters.
#3: Updated Beneficiary Designation Forms
If there are conflicting provisions within a will or trust, they can generally be overridden by beneficiary designation forms on life insurance policies, 401(k) accounts, and other assets. For this reason, it’s vital to ensure that your designation forms are up to date each year.
Contact an Estate Planning Professional
Estate planning isn’t something you can (or should) attempt on your own. It requires the guidance and expertise of an attorney who specializes in estate plans. At Bradford & Holliman, we have the experience you need to craft an estate plan that fits your needs. Contact us today for a free consultation!