Over 70% of Americans do not have their estate plans properly set up.
By: Max Valavanis, CFP®
Over 70% of Americans do not have their estate plans properly set up. These are the documents that dictate what happens to you and your possessions when you pass away or become incapacitated. There are many different pathways to an effective estate plan, but the following are five important documents when creating one.
LAST WILL AND TESTAMENT
In the event of your death, who will handle your affairs? With this document, a personal representative is named and authorized to pay out of your estate all of your debts and expenses, including funeral and burial. Your representative will generally be given the power to sell, negotiate, rearrange, exchange, transfer, or assign money or other wealth you have left behind. Here you may list your tangible and intangible property that you wish to bequeath. It is only here that your survivors will read your final wishes, which are to be made public and may include the details of your religious and ceremonial convictions. If you still have minor or disabled children this document will appoint their guardian(s), which is almost certainly to be a trusted family member or a best friend. Without their appointment as guardian(s), they would probably have a court battle with the State to take care of them, but it will be far more painful if you do not have this document. If you die without a will and you have not prepared otherwise, you will die intestate. Dying intestate could set the stage for a nasty and lengthy civil mess for your family.
REVOCABLE LIVING TRUST
This handy document will not replace your will. Instead, it will generally take ownership of your otherwise probatable estate. Your last will and testament continues to address your other wishes. Simply put, once drafted, your revocable living trust can be funded by monetary and equity transfers by you. This means you will basically “give” all of your probatable estate to your trust, thus removing it from your ownership. Since the trust is revocable, you will maintain full control over your wealth just as you did before the transfer. This “control” is afforded by your trustee, whom you appoint to manage and protect your trust assets. If you are healthy, willing, and able, this trustee is usually yourself and/or your spouse, but this is not required. Your trustee can be anyone you believe to be reliable and “trustworthy”, such as your child, best friend, niece, or nephew. Your revocable living trust may be terminated or amended at any time. Funds or property can be sold or purchased using your trust as if you were doing it yourself. And, of course, when you die none of the funds or property will suffer the wrath of probate, saving potentially thousands in attorney fees, court costs, and delays.
DURABLE POWER OF ATTORNEY APPOINTMENT
This is one of the most powerful types of documents and is very useful when you are incapacitated, absent, unwilling, or just not confident. Generally, you will appoint a competent person to handle all of your financial or healthcare-related affairs while you are still living for any length of time. This document is drafted before you need assistance. Your attorney-in-fact will be given the power to sell, rent, buy, or lease any real property, as well as transact any other financial business on your behalf. This includes paying your debts, collecting money owed, voting on stock, borrowing, investing, paying taxes, gifting, etc. Without this document, it may be impossible for someone to continue your financial affairs without crossing significant hurdles. Often, there are two separate Power of Attorney appointments. One to appoint someone to handle finances, the other to handle healthcare-related responsibilities. LIVING WILL This is a document that will arise as valid and necessary when you have a terminal condition, have an end-stage condition, or have been determined to be in a permanent vegetative state. Next, your attending physician and another competent consulting physician must determine that there is no reasonable medical probability of your recovery. Only after this can your wishes be honored. With your living will you can direct the community to remove or withhold any life-prolonging procedures as long as those procedures would serve only to prolong the process of dying. The only procedures which may be authorized are the ones to relieve pain and to aid in comfort. These five simple documents, if properly drafted by an attorney, could keep your loved ones out of the courthouse and at home where they belong, whilst saving thousands of dollars in the process. To get started is as simple as calling our office, ValaVanis Financial, at (321) 956-7072.
Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). ValaVanis Financial and JWC/JWCA are unaffiliated entities.