Thinking about how you want your property and assets distributed upon your passing is an important step toward looking after your family and loved ones, yet it's a step not enough people take. In fact, 55% of all Americans do not have a last will or other form of estate plan.
Wills, living trusts, living wills, and powers of attorney were all once associated with the elderly or the wealthy. Not anymore. Anyone with children, property, pets, or other assets is advised to have at least a will in place in order to protect their loved ones.
Last Will and Testament
A will is one of the documents used to your last wishes are followed upon your passing, and it can determine not only what happens to your assets or how property is distributed, but it can also outline what happens to your children, pets, even your debts. Here are some questions that can help you keep your will up-to-date:
- Are you content with the way your estate should be distributed?
- Do you want to keep the same executor? Beneficiaries?
- Is there a new charity or organization with which you've become involved that you would want to include?
- Has the value of your assets changed? It might make sense to take another look at your property and other assets, especially as we emerge from a recessionary economic climate
- If you had designated guardians of your minor children, are those children still considered minors? Are you happy with the arrangement you previously or initially determined?
Like a will, a living trust distributes your assets to your beneficiaries. In recent years, the living trust has gained in popularity because, unlike a will, it avoids the public, often lengthy and/or costly probate process. As things change in life, your living trust should reflect these changes. Some reasons why you might need to update yours include:
- Did you get married or have children?
- Do you want to change your successor trustees?
- Did you buy or sell property?
- Did you receive an inheritance?
- Do you want to change the guardians of your minor children in your pour-over will?
For matters specific to your health care, a living will provide guidance to your loved ones regarding difficult life-sustaining decisions. With a living will, you can make decisions in advance about life support, medication, tube feeding, and artificial hydration in the event that you become terminally ill or are unable to speak for yourself. Also, with a health care power of attorney, which is often included with a living will, you can authorize someone to ensure your wishes are followed. While most people associate living wills with the elderly, unexpected health events can happen at any age, which is why it's important to have one in place. Some common reasons to update your living will are:
- Are you going to undergo surgery?
- Have you had any significant changes to your health?
- Have any of your wishes for life-saving support changed?
Power of Attorney
Estate planning is just as much about planning for the unexpected as well as the expected. When unplanned events do happen, such as an illness or an absence, you can be prepared with a power of attorney to have a designated representative handle important, specific affairs for you. Here are some situations in which a power of attorney can help manage your affairs in your place:
- Do you have an upcoming financial transaction, such as buying or selling property?
- Are you about to undergo a significant medical procedure?
- Are you departing on a long term business trip or vacation?
Life Changes, So Should Your Estate Plan
When certain key changes happen in life, don't forget to periodically check up on the plans you've set in place. As another year begins, take a moment to look over your various legal and financial documents to make sure you still agree with what's in writing and update as necessary.
And one last note: Be sure to tell someone about the plans you have in place and where your documents are located. Estate planning can often be a collaborative affair and you'll want to make sure your loved ones know where you store these very important legal documents.