The term “estate planning” may conjure up the image of an elderly couple roaming the gardens of their country estate discussing what to do with their considerable family fortune when they die.
A common belief is that estate planning is only for the wealthy. We may think that average folks don’t need estate planning. But, that’s just not true. Estate planning is important even for people who have very little. No matter your financial worth, if you don’t specify your wishes, you may leave your family’s future in the hands of the court.
In my practice, estate planning begins with a conversation about the nature and value of assets and the makeup and dynamics of the family. We determine if a will or a trust is the right vehicle for you. We also discuss two other key pieces of an estate plan: a power of attorney and an advance directive.
The will is a legally binding set of instructions for the person who will receive your real and personal property in the event of your death, as well as who will be the person in charge of distributing this property. It also clarifies your wishes for burial or cremation.
In your initial session with me, you may discover that a trust rather than a will is a better planning tool for you. By setting up what’s commonly called a “living trust” you can place most of your property – accounts, cars, your house – into the trust. Upon your death, this property automatically passes to those you have chosen. But, while you are living, you continue to have full control over your assets. Generally, the purpose of creating a living trust is to avoid “probate” and to create a smooth transition for transferring property. I will say more about probate in another article.
A power of attorney gives someone else the power to act on your behalf in certain circumstances. This person is typically your spouse, a relative or a close friend, and they are given authority over your financial matters in the event of your incapacity. Their powers may actually extend to broader financial matters such as running your business.
You may also elect to have an advance directive which spells out your wishes for health care decisions should you be unable to express your wishes due to ageing or incapacity. Copies should be given to health care providers and trusted friends or relatives.
Whether you’re single or married, young or old, in a traditional or non-traditional relationship, have a $100 or 10 million dollars, planning with these documents is vital for protecting your family, your property and your peace of mind.
Bob Good has practiced law in Jackson County for 23 years, specializing in family law, estate planning and administration and business law. Contact him at his Ashland office at (541) 482-3763.