Wills, trusts, and other aspects of estate planning set forth your wishes for how your money, property, and other assets will be distributed, and who will become guardians of your minor children when you die or become incapacitated. You can also create health care directives become your voice in the event that you are too injured or ill to make decisions about your own health care.
Even if you have very little money or property to deal with, estate planning can ensure that your wishes are carried out and make it as easy as possible on your loved ones during a time that is difficult enough without facing financial and legal challenges.
Wills
A will lets you decide how your property and assets will be distributed when you die, and who will care for your minor children and pets. It minimizes the probate process for your loved ones. You can give your money and property to anyone you choose including charities.
If you die without a will, things may not go as you would expect. The court decides who gets what, according to the laws in your state and the states in which you own property. Although each state has its own intestate laws, generally your heirs will be prioritized beginning with your spouse, minor children, parents, siblings, and so forth. If no living relative is found, your estate will typically go to the state.
Unmarried couples suffer the most when there is no will, because the survivor is not recognized by law as an heir. If you and your partner are not married and you have no will, your partner could be left with nothing, even if there are no legal heirs. It does not matter how long you have lived together. Contrary to popular belief, few states recognize common law marriage and in those that do the length of time a couple has cohabitated is irrelevant.
Living Will and Health Care Power of Attorney
A living will is also called a health care directive. It is a document which lays out instructions for your medical care in the event that you are unable to communicate or make decisions. A health care power of attorney designates a specific person to make health care decisions on your behalf under the same circumstances.
Some states have very strict laws determining what constitutes a valid and legally binding living will, so it is important to consult with a local estate planning attorney when drafting your living will. To ensure that your wishes are carried out, it is best to have both documents.
Trusts
A trust can be established while you are alive or established by your will when you die. There are several benefits to trusts. You can use a living trust to keep your assets out of probate when you die. A trust allows you to designate the beneficiary and how, when, or for what purpose money is distributed to that person. There are several types of trusts. Some can protect the value of your estate by helping your loved ones avoid excessive taxes on your assets.