Estate planning is the process of arranging for the disposal of one’s properties after their death. When a person passes away, the management of their property is important because it can be the cause of chaos after someone passes away. Estate planning ensures that all of a person’s property is managed well and distributed among their dependents after their death. According to Advance Capital Management, 55% of Americans pass away without estate management or a will. Estate planning can take many forms, so let’s look into this subject in more detail.
A will is an essential part of estate planning. A will helps you decide who will own what property after you have passed away. A will empowers a person when they are living to decide who will inherit what property after they’ve passed on. It also gives one the power to make other important decisions, such as choosing a guardian for their children. It ensures that there is continuity after the death of a person. It also protects the rights and affairs of loved ones after one passes away. A will is an essential document in estate planning that de-escalates tensions between interested parties after one’s death. A will can only become legally binding after one dies, and it has to go through the probate process for the property to be given to the beneficiaries.
A trust is another important estate planning tool. A trust ensures that all property is distributed to the proper beneficiaries after one’s death. One creates a trust and transfers ownership of their property to it. The trustee then distributes the property to the listed beneficiaries as indicated. Unlike a will, a trust does not need to go through the probate process. In a trust, there can be a pour-over where the property that you didn’t indicate is handed over to the trust. One can have both a will and a trust.
The Power of Attorney
Estate planning is not complete without the power of attorney. Power of attorney gives authority to an individual to manage the property in case one becomes incapacitated. This happens in trusts. When one can no longer act on their property as willed, then the power of attorney can give a trustee the power to act on one’s behalf.
Are you interested in putting together a will? Do you need help choosing a power of attorney? Contact Woodworth & Holter, PLLP today for all of your estate planning needs.