If you have ‘stuff’…..you have an estate

Most people think that to have an estate you must have a few million dollars, live in a mansion with butlers and maids and a chauffeur.  Not so.

If you live at home, or have a studio apartment, a 1-2 bedroom condo, or a home of any size; if you have a bank account with $25., or a car, if you have personal items. If you have any or all of these, you have an estate.

Estate Planning is essential for any size estate, even when in your 20’s.  It means you have set up specific legal documents not only designating beneficiaries to inherit your estate should you die, but also setting up health directives for your care should you become too ill to care for – or make decisions at the time for – yourself. These documents can and should be updated…adding to or subtracting from…due to life changes; birth, adoption, marriage, divorce, remarriage, etc. These legal documents are your wishes and will be followed as stated.  This will also mean that should it become necessary to utilize any or all of them, a loved one won’t have to make choices for you, and although trying hard to do the right thing, may not choose what you would have wanted done.

More likely than not, these documents will be in your safe for a long time.  The idea is to have them at the ready should the unexpected happen.  Look over them occasionally making any changes as needed along the way.  We all take our last breath…. we just don’t know when that will be.

You should also talk to a trusted relative or friend about your final wishes, what type of arrangements you’d prefer as to the disposition of your remains (whether you wish to be buried or cremated). You should also tell this person(s) where these documents are kept.

Beneficiaries:  You should have beneficiaries on everything…even your $100. savings account. If you don’t, should you die, what you have lies dormant for 3 years, then goes to the state.  There can be high probate costs and lengthy court delays, and in the end, what is left could go to someone you didn’t want to give it to.  There is a legal ‘chain’ of how the state decides.

Instead, you decide.  Put beneficiaries on everything….(you can change them if you want to).  This doesn’t cost anything to do…check with your bank, insurance policy, retirement account, etc.  You can put Primary Beneficiary(s), and Contingent Beneficiary(s).  The Primary(s), would receive it first, if they have died it goes to the Contingent(s).

Health Care Proxy:  Medical decisions for yourself…directing medical professionals to abide by your wishes for your care.  It also gives the person(s) you trust, availability to your health records and your doctor can speak to them regarding your health.  The person(s) you choose is your proxy…while you are being cared for.

Durable Power of Attorney:  Living document naming one or two trusted people. They will be able to pay your bills, sign checks, withdraw money from your bank account for your benefit and make any legal and financial decisions for you should you be unable to do so for yourself.

Living Will: Your wishes for medical directives, should you become incapable of making them for yourself, due to a catastrophic incident.

Will:  Your wishes as to who will inherit your estate, how it is divided and to whom, and can list specific cherished items and a recipient of your choice for each.  You can also add an addendum (a change), to it, rather than rewriting a new one. Wills usually go through Probate.

Trust: There are two kinds, Revocable and Non-revocable.  Revocable means you can make changes.  Non-revocable means you cannot.  There are also different types of trusts within each.  It is/can be done in place of a will. A Trust will avoid probate costs.  A trust is private. No one, other than those mentioned in the Trust will know of its’ contents.

All of the above, except the Non-revocable Trust, can be changed.  At every life change, they should be looked over, and updated if necessary.  Or, most certainly, if you, yourself want to take someone off, due to family dynamics. And, it is also a wise idea to add a phrase to avoid anyone (without naming names), who you don’t want added to it, or in any way receive any part of your estate from getting it.  The following is an example:

“Let it be known that any and all other person or persons not mentioned in this My Last Will and Testament (or Trust), I have omitted purposely and not through accident or mistake”.

Having each of the above, gives you peace of mind, knowing that your wishes, whether you are ill, or have passed away…. your wishes will be followed.