In the next two weeks, I will publish my new series entitled, Estate Planning – What You Need to Know. Here is part 1.
1. What is an Estate Plan?
An estate plan is a set of legal documents that allows certain things to happen when you die or if you can no longer manage your affairs.
If you have young children, it names the Guardians you want to raise your children if something happens to you and your spouse. If you have young children, this is the most important reason to do your estate planning.
It names the person you want to manage your estate when you pass away or if you become incapacitated. You don’t want a judge who doesn’t know you or your family to make the decision for you.
It sets out your plan of who you want to get your assets. You don’t want your family fighting over your stuff.
It can also significantly protect the assets you leave your children from divorce claims and lawsuits filed against your children. If you are leaving assets to your children, why not protect them?
It also names the person you want to make health care decisions for you if you can’t. Doctors and hospitals need to know who is authorized to make decisions for you.
The documents typically included in an estate plan are:
Durable Power of Attorney
Health Care Directive and Medical Privacy Act Authorization (aka HIPAA)
If you have a Revocable Living Trust, the documents will also include:
Certification of Trust
Transfer Deed to transfer your home to your trust
Schedule of Trust Property
Personal Property Memorandum
Next in the series is Part 2 Who Needs an Estate Plan.