3 Features You'll Want in a Good Estate Plan
Posted on: 17 July 2015
A comprehensive estate plan should be drafted to avoid probate and high estate taxes. Your first steps should be to assign an individual to administer your estate if you happen to be disabled, and safeguard assets in the event that you have to relocate to a nursing facility.
It is also advisable that you hire a real estate attorney from a reputed law firm in your area to help you with the drafting of an estate plan. A will is one of the features of a good estate plan. Other features comprise of a durable power of attorney as well as a living trust. Here is a detailed perspective into the features of a comprehensive estate plan mentioned above.
Will
This is a legally binding declaration or statement by which an individual, known as the testator, appoints one or few persons, known as executors, to administer his or her real estate properties and provides for the allocation of his or her estates to the designated beneficiaries and heirs at death. Failure to prepare a will may cause your immediate family a lot of trauma especially when relatives demand to inherit your estate.
Power of Attorney
Through the power of attorney, you can appoint a person whom you trust to act in your position and capacity. In the event that you become psychologically incapacitated, you will require what are referred to as durable powers of attorney for health care and finances. This legal declaration comes into effect once you become incapacitated and no longer able to manage your personal affairs.
With a durable power of attorney, the appointed person will be allowed by law to handle important things on your behalf. For instance, managing your estate, paying your expenses or handling your health care needs. Failure to prepare a durable power of attorney may see all sorts of people file court petitions seeking the mandate to manage your affairs.
A living trust
This is a legal binding contract through which your estate is placed into a trust for your advantage while you are still alive and then reassigned to your intended beneficiaries upon your demise by your appointed representative, known as a successor trustee. One of the main reasons for setting up a living trust is to avoid probate. Probate is a government process run through the courts that assist in the orderly allocation of your properties after your demise.
It is costly in terms of the legal and statutory fees and may take several years if a dispute arises. Furthermore, how your assets will be shared will be under the control of a court and not your wishes. In contrast, with a living trust, any assets in the trust as passed on to the rightful beneficiaries thus saving on time and costs for beneficiaries.
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