If you’ve ever seen Brewster’s Millions or read the story of Kalu the Chimp, you know estate plans aren’t always the simplest thing in the world. And while most of us won’t be making Richard Pryor spend a million a day to get our inheritance or gifting a primate our fortune to keep our husband from getting any, it’s important to realize that a Last Will isn’t the only document you’ll need for your estate plan.
So what else might you need? Below is a list of the documents you should think about including in your estate plan. Every document might not be right for you, but understanding what each one of them does is the first step to creating a comprehensive plan to safeguard your assets for your family.
A trust is a great way to provide for your children. Living Trusts can be set up as “revocable” (meaning you can change or cancel them) or “irrevocable” (meaning that they’re essentially gifts that cannot be revoked unless the beneficiary consents). You can chose to give your child control of the trust when he or she turns eighteen, meaning that the trust will be available on that birthday, regardless of your situation.
Trusts have a few benefits over Wills. For starters, the assets in irrevocable trusts aren’t subject to estate taxes if they accrue value. They also are private and stay out of the probate process which can sometimes be both lengthy and costly. You must choose the specific assets you’ll include in your trust (a family heirloom, for example, or real estate).
Power of Attorney
In the event that you’re incapable of making certain decisions on your own — be they financial or health related — it’s important you fill out a Power of Attorney. This document grants certain powers to an agent (the person you choose to manage your affairs) and it’s important you choose someone you trust and provide them with specific instructions. After all, it can be an emotional and stressful role for your agent. Know your wishes will make all the difference.
Anyone who caught last year’s Oscar nominee The Descendants knows about what a Living Will does. In it, you spell out what you’d like done in certain health instances. Commonly, this form is used to declare “do not resuscitate” (or DNR), meaning that, if your doctor has determined you cannot and will not emerge from a coma or other vegetative state, they will not keep you on life support indefinitely. Alternatively, you can choose to remain in that state if you so choose.
It’s never easy thinking about end of life legal matters. But being prepared makes sure that your beneficiaries and family know what you want and who you want ending up with your assets. Too many Americans — a majority, in fact — pass away “intestate,” a legal word for “without a will.” Making an estate plan gives you and your family an invaluable peace of mind.
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