How Do I Name a Guardian for My Children?
If you have children under the age of eighteen, you should designate a person or persons to be appointed guardian(s) over their person and property. Of course, if a surviving parent lives with the minor children (and has custody over them) he or she automatically continues to remain their sole guardian. This is true despite the fact that others may be named as the guardian in your estate planning documents. At least one person should be named alternate guardian in case the primary guardian cannot serve or is not appointed by the court.
What Does My Estate Include?
Your estate is quite simply everything that you own, any place in the world, including:
Your home or any other real estate that you own.
Any interests you may have in any business.
Your share of any joint accounts.
The full value of your retirement accounts.
Any life insurance policies that you own.
Any property owned by a trust, over which you have significant control.
All of your personal possessions.
What Is Estate Planning?
When someone passes away, his or her property must somehow pass to another person. In the United States, any competent adult has the right to choose the manner in which his or her assets are distributed after his or her passing. (The main exception to this general rule involves what is called a “spousal right of election” which prohibits the complete disinheritance of a spouse in most states.) A proper estate plan involves strategies to minimize potential estate taxes and settlement costs, as well as coordinating what would happen with all your possessions, home, investments, your business, life insurance, employee benefits (such as a 401K plan), and other property in the event of death or disability. A good estate plan should include directions to carry out your wishes regarding health care matters. If you ever are unable to give the directions yourself, someone you trust will know when you would want them to authorize extraordinary measures and when you would prefer they pull the plug.
Why Is Estate Planning Important for Me?
Sadly, many families don’t do proper estate planning because they don’t believe that they have “a lot of assets” or otherwise believe that their children can just come in and divide their assets by themselves. If you don’t make proper legal arrangements for the management of your assets and affairs after your passing, the state’s intestacy laws will take over upon your death or incapacity. This often results in the wrong people getting your assets and very often results in much higher estate taxes. Specifically, if you die without an estate plan in place, the transfer of your assets is accomplished through a public, court-supervised proceeding called probate. This generally takes a minimum of six months, but typically a year or more. These public proceedings are expensive and time-consuming, and they tie up your assets for several months. Even worse, your failure to outline your intentions through proper estate planning can tear apart your family. It is not unusual for bitter family feuds to ensue over seemingly small sums of money or a family heirloom.
What Estate Planning Documents Should I Have?
A comprehensive estate plan should include the following documents, prepared by an attorney, based on in-depth counseling which takes into account your family and its financial situation: A Living Trust can be used to hold legal title to your property and it provides property management mechanism. You (and your spouse) are the Trustee(s) and beneficiaries of your trust during your lifetime. You also designate successor Trustees to carry out your instructions as you have provided, in case of death or incapacity. Unlike a Will, a Trust usually becomes effective immediately after incapacity or death. Your Living Trust is “revocable” which allows you to make changes and even terminate it. One of the great benefits of a properly funded Living Trust is the fact that it will avoid or minimize the expense, delays, and publicity associated with probate. If you have a Living Trust-based estate plan, you also need a Pour-Over Will. A Pour-Over Will is used first to name a guardian for minor children. Second, it protects against intestacy in the event any assets have not been transferred into the Trust at the death of the Trustmaker/Owner. It will also invalidate any previous Wills that you may have executed. Its function is to “pour” any assets left out of the Trust into it so they are ultimately distributed according to the terms of your Trust. A Will, also referred to as a “Last Will and Testament”, is primarily designed to transfer your assets according to your wishes. A Will also typically name someone you select to be your Executor, who is the person you designate to carry out your instructions. If you have minor children, you should also name a Guardian, as well as alternate Guardians in case your first choice is unable or unwilling to serve. A Will becomes effective upon your death, and only after it is admitted by a probate court. A “Durable Power of Attorney for property A “Durable Power of Attorney for Property” allows you to carry out your financial affairs in the event that you become disabled. Unless you have a properly drafted Power of Attorney, it may be necessary to apply to a court to have a Guardian or Conservator appointed to make decisions for you when you are disabled. This Guardianship process is time-consuming, expensive and emotionally draining.HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.