Planning for the end of your life is something that may be difficult to think about. However, providing written guidance ensures both that your wishes will be carried out and that your loved ones will not be forced to make difficult decisions that could result in family conflict.
When mapping out an estate plan, it can be challenging to know where to begin. By becoming familiar with a few key terms, you can start to formulate a picture of how you want your affairs to be handled even before meeting with an attorney.
A will is the estate planning instrument many of us are probably most familiar with – this document lists how property is to be divided after death. However, not everyone is as well acquainted with the trust, a legal tool often used in conjunction with a will.
A trust is a document that establishes a relationship whereby property is transferred to an individual (the trustee) to be managed on behalf of another (the beneficiary). Trusts can be very important tools in estate planning – they may help reduce or eliminate estate taxes, and they can allow continuing control and management of assets in situations where your beneficiaries are minors, disabled or otherwise unable to take responsibility for management of their own funds. Trusts can be established either before death (commonly referred to as a “Living Trust”) or by the terms of a will.
A power of attorney can also be an important tool for managing your property. A power of attorney allows someone else to make business or financial decisions on your behalf. A power of attorney can be limited (for instance, operating only if you become incapacitated or applying only to certain actions) or quite broad.
In addition to questions regarding property, estate planning also often involves establishing a framework for making end-of-life health care decisions.
A living will allows you to choose under what circumstances you would wish to forgo life sustaining treatment if you became terminally ill and unable to verbally express your wishes.
Like a general power of attorney, a health care power of attorney delegates decision-making authority to a trusted designee. However, a health care power of attorney only grants the power to make decisions regarding medical treatment.
Speak With an Attorney
There are other estate planning tools and considerations that may be valuable for your unique circumstances. By thinking about a few basic questions in advance (will my heirs benefit from a trust? w ho can make end-of-life decisions on my behalf? what do I desire in terms of medical treatment?), you can be adequately prepared to discuss an estate plan with your attorney.