Estate planning serves two main purposes. The first is to ensure that your wishes and finances are properly handled if you become incapacitated due to illness or injury. The second is to ensure that your assets are properly handled after your death. Creating an estate plan that effectively manages the end of your life can lift the burden on you and your loved ones.
Powers of Attorney
A power of attorney authorizes an individual other than yourself to act as your agent, making decisions on your behalf if you become incapacitated. A power of attorney generally gives the agent access to your financial accounts and the right to make medical decisions for you.
Two types are available. A limited power of attorney is effective for a set time period, while a durable power of attorney gives an agent authorization to continue making decisions about your finances and healthcare as long as you are incapacitated.
Health Care Directives
Health care directives, commonly called living wills, are legally-binding instructional documents that officially declare your healthcare decisions in the case that you are incapacitated and unable to communicate them yourself. These documents take the healthcare decisions out of the hands of your family members when it comes to life support and other life-saving treatments.
Wills deal with the division of your assets after your death. With a will, you specify to whom your assets should be distributed and name an executor to handle this division of assets. If you do not have a will, your estate is usually handled by the state and the division of your assets will be at the state’s discretion.
A trust is similar to a will in that it deals with distribution of assets. With a trust, you specify beneficiaries and a trustee who handles the allocation of the trust. The main difference between a will and trust is that a trust does not have to go through probate, which eliminates probate costs.
Planning for your death isn’t an easy task. You want to make sure that everything is in order, so that your loved ones will be taken care of one you are gone.
Michael R. Weinstein is an experienced attorney, who can help you determine which estate planning tools are right for you, and help you prepare a sufficient estate plan that will ensure that your loved ones aren’t left to make hard decisions on your behalf. If you’re ready to start planning your estate, call Michael at (714) 619-9376 or email him at [email protected].