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Estate planning is one of the best gifts that you can give to your loved ones, by making sure that things will go as smoothly as possible for them when you die. Estate planning also benefits you while you are alive by establishing who will make decisions and handle your affairs if you become incapacitated and allowing you to make decisions in advance about your healthcare.
Estate Planning Basics
Some of the basic elements of estate planning include:
- Revocable living trust
- Special needs trust
- Pet trust
- Durable power of attorney
- Medical power of attorney
- HIPAA authorization
- Directive to physicians (living will)
Why You Need a Will
Everyone should have a will. Even if you have no assets to speak of, a will is your chance to make decisions for how things will be handled when you die, including who will care for any minor children, and who receives your personal items. If you do have assets you can choose who will receive them.
If you die without a will, called dying intestate, your assets are distributed according to state law, and may not go to who you would choose. A judge will appoint a guardian for your children.
Powers of Attorney
A durable power of attorney designates who will handle your financial affairs if you become incapacitated. If you have not created a durable power of attorney, the court may have to appoint a guardian for you.
A medical power of attorney is used to designate who will make medical decisions on your behalf if you become incapacitated.
Powers of attorney are important for adults of any age. You never know when something might happen that will cause you to be permanently or temporarily incapacitated.
A revocable living trust can hold all of your estate. You remain in control of, but when you die nothing in the estate has to go through probate. This gives the beneficiaries quick access to funds that they may need right away.
A special needs trust can protect your special needs child’s eligibility for government benefits, while still allowing him to receive funds to supplement those benefits and pay for things that government benefits do not cover.
A pet trust allows you to choose who will care for your pet and exactly how they will be cared for, as well as funding their care, and much more.