Read & ReadJune 7, 2021
The No Estate Estate Plan
The No Estate Estate Plan is your guide to estate planning when you don’t own property. If you already read our blog on Trust vs. Wills and 5 Reasons to Have a Will. Then you know there are estate planning tools for every person and circumstance.
In this post we will discuss the 5 must haves tools for every estate plan.
Even if you do not have substantial assets, a will or trust should be the main component in your estate planning tool kit. As discussed in 5 Reasons to Have a Will, without a will in place the state will decide how to divvy your assets. This can be everything from 401(k) and savings to items of value in your home. Regardless of how robust your assets are, what you have worked hard for should go to people of your choosing.
In 5 Reasons to Have a Trust, we highlighted the roles trusts play so your beneficiaries can skip the probate court process and avoid costly fees. This alone makes having a trust worth looking into.
If you have minor children, or are thinking about having children, you will want to ensure your chosen estate planning tools have a guardianship clause. Many clients prefer to name an individual or couple that will raise the children with similar values. Selecting someone who is financially stable is also something to consider. In addition, it is recommended to designate a contingent guardian, in the event the initial selection is unable.
This is one of the most well known components of estate planning, and can be a part of a will or trust. Even without owning property, there are many assets of value you may wish to designate to specific friends or loved ones. For example; life insurance compensation, savings, 401(k) or company pension, and family heirlooms. You may also wish to designate items of sentimental value to specific individuals, knowing how much more those trinkets will mean to them. As we’ve mentioned in prior posts, if you don’t assign assets for distribution, the court will do it for you.
Power of Attorney
Two common types of Power of Attorney (POA) documents are durable and healthcare. Durable POA is used to establish the person you wish to manage financial decisions on your behalf, when you are unable. While this person is often a spouse or other immediate family member, you can also assign a trusted advisor that you believe to be more financially in-tune.
Healthcare POA is the person assigned to handle health related decisions and care, in the event you are unable. If you prefer the durable and healthcare POAs can be the same person. As always it is recommended to select a trusted person. As well as, a backup in the event your first selection is unable to perform the duties as designated.
Letter of Intent
This simple document can be used to define your preferences with assets or property after your death. In addition to explaining your wishes for a funeral or memorial service. While this document can be used to express wishes, it may not be valid in the court. However, a letter of intent still helps inform a probate judge of your intentions. Which will give them more insight into how you might have allocated assets.