So much in life demands preparation. We prepare for interviews and exams and our future, but often neglect the time it takes to plan for our death. While death is not something we like to think about, refusing to think about it does not prevent it or postpone it from happening. When we refuse to plan for our death, it is our loved-ones who suffer not only from our loss, but from our lack of preparation. An estate plan allows you to determine how your property (real property and personal property) will be distributed to your heirs and allows you to put certain safeguards in place to limit the taxes on your estate.
There are several different things that can go into an estate plan such as a will, trust, living will, and assignment of power of attorney. A will is a document that dictates how you want your property distributed (see Understanding Wills). As a father, it is particularly important to have a will as it allows you to name a guardian for your children in the event of your death. If you do not have a will at the time of your death, every state has its own laws governing how estates are distributed and to whom. The state will also determine who will be the primary-care giver for your children. If you want to retain control over how your assets are distributed and choose who will care for your children after your death, it is important that you include a will as part of your estate plan.
A living will is a document that allows you to make decisions relating to your health if you are not able to do so (see What is a Living Will?). For example, a living will allows you to determine how you want to be treated or not treated in the event that you suffer from a terminal illness or are incapacitated indefinitely for any reason. This document allows you to decide what kind of life-saving measures you want taken (or not taken) before you are in a situation where you can no longer tell people what you want.
A power of attorney is someone that you choose to act on your behalf when you are not able to act for yourself. For example, if you are affected by Alzheimer’s disease or become mentally impaired for any reason, your power of attorney will act as your advocate, making decisions that are in your best interest and protecting your estate. You may also choose a medical power of attorney that is responsible for making decisions relating to your health when you are unable to do so. It is a good idea to talk to an estate planning attorney to better understand the types of powers of attorney and to help you decide what is in your best interest.
A trust is something you can establish to protect your estate from certain taxes, determine how and when your estate is distributed and avoid probate. Probate is the court process that ensures your estate goes to the proper beneficiaries; it governs the distribution of your assets and provides an opportunity for your will to be contested by individuals who stand to profit as beneficiaries. A trust allows your assets to be distributed immediately after your death to the trustee(s) that you have named on the trust. When you establish a trust, you will no longer be the owner of your real-estate or other assets included in the trust. Instead, those properties and assets belong to the trust and you act as the trustee as opposed to the owner. In this way, you still have control over your property and assets, even though you no longer legally have ownership. Control of your estate may pass to beneficiaries you have indicated at any time you decide. An estate planning attorney should be able to help you decide if a trust is the best option for your estate.
As a father, it’s hard to think about not being there for your son or daughter. Estate planning allows you to make sure your family is cared for when you are no longer there to care for them. It is especially important to have your affairs in order if your children are still young so that you can make decisions about their welfare if you are not able to care for them. The laws governing estate planning vary from state to state. Therefore, it important that you seek the advice of an experienced estate planning attorney to help you understand how to develop a plan in that is in the best interest of your heirs. Laws are constantly changing, so it is a good idea to check over your estate plan once a year and revise it to stay current.