In estate planning, one common tactic individuals consider to avoid probate is adding their children…
Want another way to show your family how much they mean to you? Make sure you have these three critical documents in place, and let them know where they are.
You don’t have to be a globally-recognized musical genius to take care of your family. All you need to do is make an appointment with an estate planning attorney to have three relatively simple documents created. The families of Aretha Franklin, Kurt Cobain, and Prince may have been well-loved by their famous relatives, but none of these bold-face names had a will. Their families were left to engage attorneys and battle with each other and the courts to figure out who gets what.
Motley Fool reports in the article, “3 Must-Have Estate Planning Documents To Get Done This Year,” that dying without a will creates numerous problems for your family. If there are no legal instructions in place, probate law dictates the distribution of your assets and selection of guardians for your minor children, which can cause problems. Regardless of your personal situation, you should think about creating these three important estate planning documents.
- Will. A will is used to distribute your estate, according to your instructions. A will can say how much and what type of asset each heir will receive, to minimize family fighting after your death. If you have young children, you can designate guardians in your will to be in charge of their care. If you die without a will, the probate judge will order who becomes their guardian.
You also need a will to make charitable bequests, to expedite the probate court process and to reduce or eliminate estate taxes. When you draft your will, you’ll appoint trusted people to serve as the executor and the trustee.
- Living will. A living will can take effect while you are still alive. This is a legal document that sets out your instructions for medical treatment, if you become unable to communicate, such as whether or not you want to be placed on life support. A living will can relieve the emotional burden from your family of having to make difficult decisions.
- Power of attorney. This legal document helps in the event you’re incapacitated or in the hospital in an unresponsive state. A power of attorney gives the individual you designate the authority to transact financial and legal matters on your behalf. Set up a power of attorney, before you need it. If you don’t and you’re unable to make decisions, your family may have to petition the court to get those powers, which costs time and money.
These are not complicated documents and they won’t take years to create. They just need to be done. Call your estate planning attorney and make an appointment. If you haven’t updated these documents in a while, make an appointment for a review. You may not need a completely new estate plan, but there may be changes that need to be made.
Reference: Motley Fool (February 18, 2019) “3 Must-Have Estate Planning Documents To Get Done This Year”