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Top 6 Estate Planning Tools That You Should Know About

An estate plan is simply a written document outlining how one’s assets should be distributed upon death or incapacity. It includes wills, durable powers of attorney for health care decisions, deeds transferring property ownership, trusts, life insurance policies with beneficiaries listed, funeral arrangements made in advance, the list goes on. It’s important to have a plan should the unexpected happen. There are many tools that can help you plan for the future, and here are 6 of them! These 6 estate planning tools will empower you to get more organized and get your affairs in order so that your last wishes are fulfilled. 

Last Will and Testament

Anyone can write a will, but it’s important to make sure all of the necessary documents are complete before you die. A last will and testament are one of the most straightforward estate planning tools that everyone should know about. With this document, as this estate planning attorney in Manhattan explains, you’re able to state whom your assets should go to, which beneficiaries should receive certain gifts, and even who should be responsible for your children. 

A lot can happen in the time between drafting a will and your death that could impact the validity of your last wishes. When you write a will, assign an executor to manage your estate when you die. The executor is in charge of carrying out your final wishes. A power of attorney for health care can also be included in your estate plan to designate who will make medical decisions when you cannot, which is especially important if there are children involved. 

Living Will

A living will provide instruction on end-of-life medical treatment that one would want or not want, in the event, they become incapacitated and unable to communicate their wishes. In some cases, a living will be necessary because you can name your health care proxy or medical power of attorney in your last will and testament. If not, then a separate document is needed. 

Living wills are more specific than a do-not-resuscitate (DNR) order. However, they can be combined to ensure your wishes will be carried out after you pass on. Also, the living will is typically written in a manner that allows it to be changed or modified as needed. 

Medical Power of Attorney

The medical power of attorney is a document that designates a trusted individual to make medical decisions on your behalf while you are incapable. A power of attorney can be granted while living or by naming them in your estate plan. This power should not be granted to anyone that will benefit financially from the designation to ensure there is no doubt about their motives or bias.

This legal document designates a trusted individual that you’ve chosen to make medical decisions on your behalf when you’re no longer able to. This is especially important for married couples where one spouse can’t make such health care decisions alone. 

Healthcare Proxy/Advanced Directive

This document allows the person named as your healthcare proxy, or agent, to make medical treatment decisions on your behalf in the event you are unable to, including authorizing surgery or any use of life-sustaining treatment. 

An advance directive provides instruction on what you would like done if you’re incapacitated and unable to communicate your wishes. It outlines how much medical treatment to receive, where to receive care, and the patient discloses any religious beliefs related to healthcare so that they can be respected. 

Living Trust

One of the more common reasons that the living trust is used is to avoid probate. After you die, your assets will go to the person you’ve designated in your living trust rather than passing through the court system. Probate can be a long and costly process and these trusts allow for quick and easy distributions of assets without having to go through such a process. These trusts also provide an excellent way to protect your assets while they’re still in your name. 

A living trust is one of the most powerful estate planning tools available, and it’s important that you take advantage of this document if you want to ensure that your assets don’t get lost or mishandled after death. A living trust ensures that all of your wishes for how your assets are valued during your life, as well as how they are distributed after you die, are honored. 

The living trust is a legal document that provides for the management of assets within the trust that can be changed over time. It’s important to note that the living trust isn’t similar to a will in that it doesn’t have any effect on the distribution of any property during your life. But after you die, this document will determine how your assets are distributed. 

Power of Attorney for Finances

The power of attorney for finances can be used if someone does not want to incur the time and expense of probate by putting control over their financial matters in the hands of an executor. A proper power of attorney for finances includes a list of specific powers granted to designated persons. 

This legal document designates an individual to act on your behalf by making financial decisions, paying bills, writing checks, and preparing tax returns. They are typically used when someone is unable to oversee their own financial affairs.

 

If you want to get organized and plan for the future, there are a number of estate planning tools that can help. The 6 we’ve listed in this article should give you plenty of food for thought about how best to design your own documents or choose an attorney to do it if you’re not up for such tasks on your own. If any of these sounds like something you need assistance with, please do not hesitate to consult with legal experts on this matter.

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