Estate planning is the preparation of documents to protect and manage your assets and personal property in the event of your incapacitation or death.
An estate plan may consist of the following documents:
Revocable Living Trust
– Your Revocable Living Trust is the foundation of your estate plan. It contains your instructions for your own care and the care of your family if you become disabled, as well as for the distribution of your assets upon your death. Your Revocable Living Trust allows you to keep your instructions and financial affairs private and ensures that your instructions are carried out efficiently without unnecessary judicial involvement.
Last Will and Testament
– Your Last Will and Testament contains your instructions for the distribution of any assets owned by you, personally, at the time of your death. Typically, if you have a Revocable Living Trust, your Last Will and Testament leaves any property that was not transferred to your Revocable Living Trust before your death to your Revocable Living Trust. Thus, the Last Will and Testament functions as a safety net to ensure that the property owned in your individual name rather than in the name of your Revocable Living Trust at the time of your death is ultimately managed by your successor Trustees as provided in your Revocable Living Trust.
Power of Attorney
– With this document, you appoint an agent to act for you if you become incapacitated. Your agent is authorized to transfer property to your Revocable Living Trust, to make withdrawals from your retirement assets, or to do anything else that you want your agent to do for you if you become incapacitated.
Advance Health Care Directive
– Your Advance Health-Care Directive authorizes your agent to make medical decisions for you if you cannot express your wishes or make the decisions yourself. In addition, your Advance Health-Care Directive authorizes your agent to obtain copies of your medical records.
Real Property Transfers
– Property deeds are formal, legal documents that transfer a person’s rights of ownership to another individual or entity.
Funding and organizing of existing trusts
– Instructions that explain how to transfer your assets to your Revocable Trust and how to name your Revocable Trust as your beneficiary.
Asset protection trusts
– an estate planning device which provides protection of your assets from future creditors, future lawsuits, and any future judgment.
Many people assume that estate planning is necessary only for the wealthy and elderly, when, in fact, everyone should have at least a basic estate plan, regardless of income, net worth or age. An estate plan can protect you and your assets not only after you die, but during your lifetime as well.