It doesn’t matter your net worth is or isn’t… What’s important is to have a basic estate plan in place, which ensures that your family and financial goals are met after you die.
A proper estate plan has contains several elements, which include: a will; a power of attorney for property; and a living will and a health care power of attorney. For some people, a trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.
The following are few things you need to get your affairs in order.
- Assets Inventory: Your investments, retirement savings, insurance policies, and any real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you’re ever incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?
- A Will: A will states exactly where you want your assets distributed when you die. It’s also the best place to name guardians for your children if you have any. Dying without a will can be costly to your heirs and leaves you no say over who gets your assets as the whole matter will end up on Probate Court. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.
- A Living Will: Also known as an advance medical directive, is a statement of your wishes for the kind of life-sustaining medical intervention you want, or don’t want, in the event that you become terminally ill and unable to communicate.
- A Trust: Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.
In all cases, it is highly recommended that your seek the advise of an attorney who is well versed in Estate Planning Law. They will guide you though the process of creating a personalized Estate Plan that will properly take care of matters as you wished after your death.