No one enjoys thinking about their own mortality, and that’s one of the main reasons why only about four out of every 10 American adults have an estate plan in place.
But estate planning is much more than just creating a will to distribute your assets after you die. Individualized planning protects you and your property while you’re still alive, as well as helping your family cope with a difficult time.
Five “Should-Haves” for Estate Planning
Working with an experienced Tennessee estate planning attorney is vital to creating a plan that meets your needs. Here are the most critical items to consider:
Living trust: Also known as a revocable trust, this legal document places your assets into a trust, which you can still use as you wish during your lifetime and will be distributed according to your wishes when you pass away. This strategy allows assets to avoid probate, maintains privacy and speeds up the transfer of assets to your loved ones.
Updated beneficiaries: Many assets live outside your will or trust, such as pensions, 401(k) plans and insurance policies. Accounts with up-to-date beneficiaries avoid probate and go directly to your designated recipients.
Pour-over will: While a “regular” will includes all your instructions on who inherits your property, a pour-over will works with a living trust by acting as a safety net to move any assets into the trust that weren’t included while you were still alive.
Power of attorney: This document authorizes someone you trust to make decisions on your behalf for legal, medical or business matters if you become incapacitated and are unable to make those decisions for yourself.
Living will: This document doesn’t address assets. Rather, a living will, also known as an advance directive, outlines your instructions for medical treatment and end-of-life care if you become too ill or injured to give consent. Taking this step protects family members from making these devastating decisions on their own during a difficult time.
Each Estate Plan Is Different
There is no boilerplate when it comes to estate planning. Each person’s needs, wealth and wishes are different. Working with a lawyer who understands the complex laws can maximize your wealth, reduce tax liabilities and ensure that your assets smoothly transfer to your loved ones.