When it comes to planning for the future, estate planning is not one that many people like to think about. This is only natural. Many people are hesitant to think about what will happen after they die. On the other hand, it is also important to make sure there is a plan in place. This will ensure that loved ones and financial goals are met once that fateful day comes. When it comes to estate planning, there are a few important factors to consider.
First, it is important to think about a will. According to marcjblumenthal.com, “Any property held solely in the name of an individual who has not named a beneficiary, such as with life insurance, needs to have a will to pass those assets to the persons or entities of their choice.” The job of a will is to outline any wishes that might be in place for assets that an individual owns at the time of his or her passing. In a will, someone can make people who should receive these specific assets. If there isn’t a will in place, the assets will immediately go to the closest family member. A will can cover any electronic assets as well. A will is a must in the world of estate planning.
Next, it is also important for someone to have something called a healthcare power of attorney, or HPOA. This is a signed legal document in which an individual can name someone to make healthcare decisions in their stead. For example, if someone is in the hospital and unconscious, who can make healthcare decisions for them? In addition, it is also important to have a living will. This is also called an advanced medical directive. This outlines someone’s wishes regarding how they would like to receive medical care if they are unable to make decisions. These documents can frequently be drawn up at the same time as a will.
In addition, there is something called a financial power of attorney that many people overlook. Similar to the HPOA, an FPOA outlines who an individual would like to make financial decisions for them if they become unable to do so. If there isn’t an FPOA in place, then nobody will be able to handle bills, financial decisions, investments, or any other monetary matters. If this is the case, the decisions will be left up to the courts. Do not let this happen. Be sure to have a financial power of attorney in place.
Lastly, anyone who is thinking about estate planning also needs to think about establishing a trust. This is a legal entity that is able to own someone’s assets and can be controlled based on the wishes that are outlined in a legal document. A trust can dictate how someone’s children should benefit from the assets in the trust once they reach a certain age. A trust can also dictate how the assets can be used by the beneficiaries. Like attorney Marc. J Blumenthal says, “Sound estate planning allows an individual to prevent unintended consequences when it comes to the distribution of assets and minimizing the effects of estate taxation.”