People in Tennessee who are creating an estate plan may need to determine who they want their beneficiaries to be as well as what kind of arrangements they want to make in case they become incapacitated. For the latter concern, they can use a durable power of attorney to appoint someone to make financial decisions on their behalf and a health care power of attorney to appoint someone to make medical decisions.
Attention to detail is vital
Assets can be passed in a number of different ways. A last will and testament can name beneficiaries and appoint an executor and guardian for minor children. With a revocable trust, assets do not have go through probate and can pass directly to beneficiaries.
Trusts have other advantages as well. If a beneficiary might spend irresponsibly, assets can be placed in a trust. A trustee can determine when distributions occur. Retirement accounts, life insurance and some other assets also pass directly by beneficiary designation. These should be reviewed after major life changes so that the wrong person, such as an ex-spouse, does not inherit.
People may want to work with professionals, such as an attorney and a financial planner, to determine what is needed in the estate plan and to prepare the documents correctly. Leaving relevant information with an attorney, such as how to contact beneficiaries, can be helpful.
Some people may want to use an irrevocable trust in their estate plan instead of a revocable one. While this places assets out of control of the creator, it also offers greater protection. With an irrevocable trust, assets can be protected from creditors and other threats. There may be expenses associated with maintaining a trust.
An attorney may help a person decide whether a will or trusts would be the right vehicles for passing assets on to beneficiaries based on the person’s situation.