Yes, You Need to Have an Estate Plan

The problem with the phrase “estate planning” is that many people focus more on the “estate”: aspect than they do on the “planning” part. They (wrongly) assume that since they have no property or major assets, they are exempt from having to plan for the disposition of their estate. The thing is that estate planning isn’t just about planning how to distribute your physical possessions. Estate planning also includes planning for your well-being when you are no longer able to make the calls about your personal health.

This emphasis on planning for when you are incapacitated or are facing death would seem to imply that this form of estate planning is intended mainly for the elderly or the infirmed. Not only is this assumption wrong, but young individuals, 18 years and older, who are healthy actually stand to benefit even more than their older counterparts from doing their estate planning.

Ironically, estate planning is actually as much about planning for your future as it is for planning for your heirs’ future. It’s never too early to start planning to maximize the investment potential of your assets and minimizing the tax liabilities for your loved ones and beneficiaries.

The ultimate purpose of estate planning is to ensure that your wishes are followed, your family members are protected, and the really hard questions about your end-of-life care already have answers. Of course, this does require some work on your part on the front end, but it will be greatly appreciated by your family members who are tasked with carrying out your wishes and are the beneficiaries of your estate.

Start with the four key documents that will help your loved ones know your wishes upon your death or in case you become incapacitated. The first document is the last will and testament, or “will” for short. This legal document generally includes the designation of an executor (a/k/a personal representative) who carries out the provisions of the will, the names of the beneficiaries who will inherit the estate’s assets, instructions on which beneficiaries will receive which assets, and the designation of a guardian for any minor children. A will only comes into effect upon your death. Without a will, the state in which you reside will decide how your assets will be distributed based on that state’s intestacy statutes.

Another important estate planning document is a living will. A living will allows you to dictate ahead of time what actions should be taken regarding your health care when you are no longer able to make those decisions. For example, it may address your preferences for care in situations where you are incapacitated, such as through a serious injury or in a coma. The living will portion usually only addresses end-of-life palliative care and discusses what life-savings measures you may or may not want.

Another powerful and necessary document that is used in concert with the living will is a medical power of attorney(also known as a designation of health care surrogate). This legal document names the individual or individuals who you would like to be in charge of your health care and make decisions for you regarding your treatment if you become incapacitated. While the living will state your wishes with regard to withholding or withdrawing medical intervention, the medical power of attorney puts the decision-making power into the hands of one person whom you have chosen ahead of time. This can help to avoid the indecision that may result if multiple family members are included in the decision-making process and can allow for your true wishes to be executed.

Another important power of attorney to have executed is a financial power of attorney. Through this document, you appoint an another individual to act in your stead on financial matters. The power of attorney should be “durable” so that it does not end upon your incapacitation because it is likely that this will be the time when the financial power of attorney is needed the most. Having a durable power of attorney executed and up to date will save your loved ones a costly visit to court to request authority to have control of your finances.

Meeting with an attorney to prepare an estate plan is often less intimidating and expensive than people initially think. Here at Jurado & Farshchian, P.L., we have experienced estate planning attorneys who help families and individuals create efficient and effective estate plans.. Contact us today at 305–921–0440 for a free estate planning consultation.

Read more at Yes, You Need to Have an Estate Plan