In addition to living trusts, there are irrevocable trusts to protect certain assets that you may want to irrevocably reserve for the heirs you choose. These assets are safeguarded from your creditors and the creditors of the beneficiaries, and can be used legally and legitimately to minimize wealth taxes. It is important to note the irrevocable nature of these trusts. At COODIN & OVERSON, PLLP, we help clients who want to formulate and document their estate plans.
Call us today at 651-209-1155 to schedule a free initial consultation. A common misconception is that only wealthy people need wills or trusts. In reality, a will or trust is an essential part of any estate plan, regardless of the size of your resources. A will or trust will direct the distribution of your estate (all your assets and liabilities) after your death, in accordance with your wishes. A will can also name a guardian for any child you have who was not at least 18 years old at the time of your death. Each of us has a complex web of financial and legal responsibilities to manage on a daily basis.
We pay bills, manage bank accounts, sign documents, and perform any number of other ordinary but important tasks. If we are unable to perform these tasks due to illness, injury, or death, chaos can ensue. Bills won't be paid, deposits won't go to our accounts, and liabilities won't be met. However, a durable power of attorney allows you to appoint a person you trust to handle your financial and legal matters in case you are unable to manage them yourself, either temporarily or permanently. Like a permanent power of attorney, a medical power of attorney, sometimes called a health care power of attorney, allows you to authorize a person you trust to make decisions about your health care if you can't make those decisions for yourself.
Having a living will or an advance health care directive does not preclude the need for a medical power of attorney, as situations may arise that are not addressed in the living will and will require the person you have appointed to make the decisions.
Most importantly, make sure your loved ones and others involved know where to find your estate planning documents. Whether you only need one estate planning document or all of them will depend on your specific situation. There are many benefits to using trusts, but depending on your assets and goals, it may be in your best interest to include them in your estate plan or not. This isn't actually a component of your estate plan, but it does play an important role if you've established it along with other accounts, such as your life insurance, an IRA, or your 401 (k) plan. Estate planning is the process of designating who will receive your assets if you die or become incapacitated.
If you have very specific instructions for your health care, you should include a living will or other medical directives in your estate plan. The appointment of a power of attorney is critical to your estate plan, as this is the person you choose to appoint as your legal counsel in fact. It's important to review your estate plan from time to time (we recommend an annual review) and document any changes you need. It's always best to add a power of attorney to your estate plan so that you can indicate who you want to take charge of your affairs if you can't. If you have questions about the process, it might be worth consulting an attorney who specializes in estate planning and possibly a tax advisor.
This is an important component of your estate plan because if you don't have it in place when you die, the state will determine how all your assets will be distributed. A good estate plan consists of many different components such as what will happen with your assets and who should act on your behalf if you can't. Regardless of age, it's important for each of us to consider having basic estate planning documents.