Estate planning empowers you and your family to carry out your wishes during and after your death. There are a lot of steps in the process to complete an estate plan. Before you do anything, though, you need to determine who you want to get what from your estate, and who will handle all those matters if you ever become incapacitated or die. Sometimes it can create discord to appoint an immediate family member as your power of attorney (POA) unless it is your spouse. It can also have the opposite effect if you decide on someone who is not a family member.
Give it quite a bit of thought before you decide. Discuss it with family members if you think it will help. You may also want to get some direction from friends and neighbors. You could make an appointment to get feedback from an estate attorney. Estate attorneys typically provide the first consul for free. Just make sure you're armed with specific direction before any estate documents are created.
Several pieces of the estate planning puzzle include the following:
* Estate Attorney – Although, you can do it yourself, you may want to hire an estate attorney to assist you in your estate planning. Estate attorneys should be well-versed on the federal and state laws that govern estates. This is especially advantageous when you do not have the time to research it and do it yourself.
* Power of Attorney (POA) – Who will you design as your POA? This will be the person you will include in your will to conduct the affairs of your estate after you became incapacitated and after your death. You'll want to weigh this heavily before deciding. You may want to appoint two different POAs – one to address your health and one to address your financial affairs should you become incapacitated.
* Living Will – You need to complete one and sign it in the presence of a notary. This will dictate your desires should you become too ill to determine the course of your own health.
* A Will – Your will determines how your property will be disbursed upon your death. It may also include provisions from your living will.
* Payment on Death (POD) – Contact your banks and securities holdings companies to complete a POD for each of your accounts. This will simplify the transfer of all assets in these accounts to go directly to your beneficies, bypassing the probate process.
* Transfer on Death (TOD) – Contact your mortgage company and other secured loans holders to complete a TOD. The TOD will facilitate the transfer of ownership from you to your beneficies upon your death eliminating the need for the assets to go through a lengthy and expensive probate process.
* Insurance Policies – Make sure you have 1st and 2nd beneficies designed on all your life insurance policies.
* Retirement Savings – Be sure to design 1st and 2nd beneficies on your retirement savings programs.
* Business Interests – You'll need to design a TOD on any business interests or holds you have to ensure a smooth transition of assets to your beneficies upon your death.
* A Trust – Depending on your resources, you may want to create a trust to protect your assets. Creating a trust bypasses the probate process after your death. It directly transfers your assets from the trust to your beneficies.