Most people don’t want to think about estate planning because they don’t want to think about their own death. Unfortunately, it’s much worse to not prepare for when you’re gone. Because it can be so hard to think about, people tend to want to rush through it as quickly as possible, doing things such as using an online program and answering a few questions and then calling it done. Unless you have a very simple estate and maybe just a single beneficiary, it’s best to not take the path of least resistance. The reality is that estate planning often becomes complicated. There are a lot of things to consider in your estate plan – here is a list of many that might apply to you:
1. The documents that you need
A. Starting with the basics, you need a will to help pass along your belongings and nonretirement assets. Retirement accounts and life insurance both have named beneficiaries and don’t go through your will, so if you change your will, it does not change these beneficiaries on retirement and insurance policies.
B. You may also need a power of attorney (POA). A POA allows another individual to act on your behalf when you are unable to do it for yourself. A POA can be limited in scope or broad based.
C. An advanced directive or a POLST (Physician Orders for Life-Sustaining Treatment) communicates your wishes regarding end of life decisions (such as being kept alive by artificial means, etc.).
D. Trusts can be important for many situations, including individuals who have minor beneficiaries, disabled children, irresponsible beneficiaries, or those with creditor issues. Assets in a trust are not subject to probate, and trusts provide privacy as the assets in a trust are not a public record as with a will.
2. Who will be my executor/trustee?
A. People often have difficulty deciding who should handle matters and distribute their estate and are worried about hurting the feelings of those who are not chosen to do this. However, this job isn’t an easy one, and you’re doing other family members a favor in not choosing them.
B. It’s ideal, if possible, to choose someone who lives close by since some of the matters may need to be handled locally.
C. The person you choose will need to be able to carry out your wishes without getting caught up in the family drama that can arise when someone passes. It might be a good idea to choose someone with a stronger independent personality that can keep the process from becoming longer and potentially more painful/expensive than it needs to be.
D. You will also want to choose someone who is younger and healthier than you and will, in theory, live longer than you.
3. Disposition of you assets
A. This can be another sticking point for some people because they want to try to be “fair” to all of their beneficiaries. It is best to discuss these issues with your beneficiaries before your death. Having everyone on the same page can help them avoid the questions of “why?” when you are no longer here to answer them.
B. One of the biggest questions is always that of who gets the house. Beneficiaries who think they want the house sometimes cannot afford it (needing to buy everyone else out) or feel entitled to it and want it for free. Leaving the house to multiple beneficiaries too often starts fights between kids. Instead, it is often best to direct them to sell the house instead and split the money.
Even just starting with the basics, there is really a lot to think about when it comes to estate planning, but it is worth it to take the time to do so and help your family avoid as much stress as possible after you have passed. For assistance with your estate planning, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC, 708-482-7090 or wwilson@wilsonwilsonllc.com
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