Are you starting the process of creating an estate plan but aren't sure what you are doing? If so, you likely have the following questions.
What If You Don't Have An Estate Plan?
If you don't have an estate plan in place for a will or trust, many things happen by default. Joint property will always go to a surviving spouse, with individual property going to your children. If you do not have a spouse, all property will be distributed equally to your children. Estate planning gives you the opportunity to do things differently than what the laws specify. Otherwise, you won't have a say in what happens to your estate and how inheritances are passed on.
How Are Wills And Trusts Different?
When you have a will, all assets are in your name when you pass away. Those assets are then frozen, and the court oversees the process of verifying what assets are in your name and divides them according to the instructions in your will. The process can be time-consuming and may delay when assets are actually distributed as a result.
A trust is a bit different because you transfer assets from your name to a trust before you pass away. Anything that is in the name of the trust doesn't go through a probate process since it belongs to the trust. Other people in the trust will then control those assets within it immediately, which speeds up the inheritance distribution process.
What Is Power Of Attorney?
Power of attorney is part of an estate plan where you give control of your estate to another person if you are incapacitated and not able to make decisions on your behalf. There are different levels of power of attorney, such as separating who makes medical and financial decisions for you. You can give someone the power to access your financial accounts so that they can pay bills and sell property, and give a different person the power to make decisions about your end-of-life care.
Is Estate Planning Necessary If You Don't Have Many Assets?
Estate planning can be a great way to protect you and your assets, even if you do not have a lot of them. A trust can help protect assets from being lost if you need to go into a retirement home, and assigning power of attorney can prevent loved ones from going through the legal process of requesting it after it is needed. Don't underestimate the need for an estate plan and how it can benefit you and your loved ones. To learn more, contact an estate planning attorney.
Share2 December 2021
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