Basic Estate Planning
• Health Care Power of Attorney
• Durable Power of Attorney
• Living Wills
• Prenuptial Agreements
If you have considerable assets (over $1 million) you probably should consider the tax savings available through a trust. For that you need a specialist, someone who has a background both in tax and in estate planning. If your assets are considerably less, a simple will, living will and a durable power of attorney can suffice for basic estate planning.
In a simple will (also called a last will and testament) you spell out who you want to leave your belongings to, and who you want to be appointed to make sure those belongings go where you want. Any life insurance policies and investments should have beneficiary designations so they will go to the people you want and not to your creditors.
Whether you’re wealthy or not, it’s important to
have a durable power of attorney in place
Your will has to be processed through the probate court upon your death. This processing is called probate, and contrary to what you may have heard, is not terribly expensive or time consuming. This process ensures your estate pays your creditors, any taxes that are due are paid and then ensures remaining funds go to the people you want them to. It is a myth to say that if you die without a will your estate will go to the state and your family will get nothing. Your money will only end up going to the state if you do not have any remaining family members.
Durable power of attorney gives someone you choose the ability to take care of your affairs if you are unable to. There are general durable power of attorney and specific durable power of attorney. General durable power of attorney allow the person you designate to handle your financial affairs, sell any property you may own and use your money to maintain your home and business while you are incapacitated. A specific durable power of attorney limits the power of your designated representative to certain power, usually health care decisions.
Whether you are wealthy or not, it is important that you have durable power of attorney in place well before you need them.