When it comes to estate planning, you need to have a few essential documents in place. These documents ensure that your assets are distributed according to your wishes after you die.
Here is a brief overview of the essential estate planning documents.
Last Will and Testament
A last will and testament outlines how you want your assets distributed after you die. This document can name a guardian that will look after your young children or pets. You can also use your last will to name an executor of your estate. The executor will carry out your wishes as outlined in your will.
Remember that a last will and testament is only valid if you are mentally competent when you sign it. You should also have two witnesses present when you sign your will.
An experienced estate planning lawyer can help draft your last will and testament. They can also guide you through the process and ensure that your will is set per state laws. Keep in mind that if you do not have a last will and testament, state law will dictate how your assets are distributed.
Revocable Living Trust
This legal document gives you a chance to transfer ownership of your assets to a trust of your choice. The trustee can manage the property to protect your beneficiaries.
There are several advantages to using a revocable living trust. For instance, the trust property is not subject to probate proceedings after you die. That means your beneficiaries don't have to wait for the court to verify the contents of your trust. Your beneficiaries can receive their inheritance quickly and without the court's intervention.
Additionally, you can use a revocable living trust to plan for incapacity. If you become incapacitated because of an illness, the trustee can step in and manage your property on your behalf.
Power of Attorney
A power of attorney allows you to appoint someone else to make decisions on your behalf. This document can be used for financial or medical decisions.
For instance, you can give your spouse or one of your children power of attorney to make medical decisions if you become incapacitated. You can also give a money-savvy friend power of attorney to handle your finances if you cannot do so yourself.
You may want to consider a durable power of attorney, which will remain in effect even if you become incapacitated. And if you change your mind, you can always revoke your power of attorney at any time as long as you are mentally competent. Talk to an experienced lawyer if you need to know more about your rights.
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