Estate Planning FAQs
Estate planning can be difficult and complicated process, regardless of personal circumstances. Depending on where you live, estate and inheritance laws can create issues with or without a will. As you consider your options, here are a few of the most commonly asked questions when planning an estate:
Do I Need a Will?
A will is an essential tool in estate planning but that doesn’t necessarily mean you need one. A will allows you to determine who receives your assets and where your possessions should go. A will is an ideal choice for anyone with assets. A will also provides a sense of guidance and support for your loved ones who struggle to understand your final wishes. For those without assets or few remaining family may not need a will.
Without a will, everything you own will be distributed according to your local probate laws. The process of starting a will is fairly simple, depending on your assets and beneficiaries. Before contacting a lawyer, start by making a list of every account, asset, vehicle, and personal possession. Consider the important people in your life and decide which people should receive each item. This list will help you keep things organized and gives the lawyer an idea of the size of your estate.
What Does a Will Include?
Truthfully, every person’s will look different. The size of your estate and the beneficiaries involved determines how much is required to set everything up.
- Basic Information. This includes contact details for you and information for your loved ones, doctors, attorneys, insurance companies, financial planners, etc.
- Supporting Documents. Make copies of any deeds, titles, account numbers, etc. to ensure beneficiaries can access any inheritance.
- Once a person passes, a will must be probated. Whether a lawyer or loved one, an executor is the person responsible for administering everything in your will.
- Assets and Beneficiaries. This is the list of assets and where they should go. Make sure to include any family, friends, neighbors, organization, or caregivers. You can also specify any stipulations, such as age requirements.
- Minors and Dependents. If you have any minors or disabled dependents, you need to decide who will become their legal guardian.
- Retirement Accounts and Life Insurance. These items are not typically included. These particular assets require you to declare beneficiaries when the account is setup. This is also true for any bank account with a specified P.O.D. (payable on death).
- Other Information. Although not typically included, these items can be included to make life planning more efficient: funeral plans, power of attorney, and advanced directives.
What if I Have Little to No Assets?
Not every person has a lot to leave behind. Seniors with small families or minimal assets can choose not to leave a will in order to save their family the cost of court fees. Depending on where you live, a small estate affidavit may be an option. People with no children, no spouse, or a single heir are ideal candidates. Go to your local county probate website to see if your estate qualifies. These types of situations may even require a simple statement of heirship.
Do I Need a Lawyer?
Making a will doesn’t necessarily require a lawyer but it is highly recommended. Many companies sell kits that can allow you to make a will online or at home, though the courts may not honor its validity. Plus, some counties have specific laws about who can serve as your executor. Lawyers make the process simple plus they can help you make any necessary changes easily. Seniors with large or complex families or large estates should absolutely consult with a lawyer. This includes anyone with significant business investments, dependents, marital discord, or any other seemingly complicated life circumstance should also consult a lawyer.
What Exactly is an Asset?
It can be hard to decide what legally qualifies as an asset. Legally speaking, there’s a distinct difference between assets and personal property. Most states consider bank accounts, cash, vehicles, real estate, stocks, and safety deposit boxes assets. Personal property includes home furnishings, tools, livestock, jewelry, appliances, and other valuable items. Life insurance policies and retirement funds do not qualify as an asset.
What is Power of Attorney?
Power of attorney is a legal document that people use in the event of a serious or catastrophic event. Power of attorney allows a chosen trusted individual to manage your household and assets in the event of severe illness, injury, or absence. Seniors with developing dementia commonly use power of attorney with particular provisions to allow a loved one to provide care when they cannot care for themselves. In the event of debilitating illness, your loved ones won’t be able to provide care without power of attorney. Make sure to choose someone completely trustworthy to manage your accounts.
What are Advanced Healthcare Directives?
Advanced healthcare directives is a legal document that determines what you would like to happen in the event of catastrophic illness or injury. In severe cases, such as comma or dementia, people are unable to make decisions for themselves. Seniors with degenerative disorders commonly choose this option to inform healthcare providers of their wishes.
When is the Right Time to Start Planning?
Honestly, you should start today. An accident could happen anytime, you don’t want to be unprepared, especially if you have dependents. Probate can be a painful and difficult process without a will, taking months and hundreds (maybe thousands) to settle. Make sure your loved ones have everything you need and make a will today.
About the Author: Victoria K. Stickley is a copywriter, editor, and senior content manager based in the Dallas area. Her graduate education in counseling and research has helped immensely in her writing as well as the care she provides for her grandparents. She currently provides support and resources to senior care websites as she learns and experiences senior care first-hand.