This is an article from Potter Law Firm (https://www.potterestateplanning.com/) in Ashland, Kentucky, that we thought others may find helpful.
The broad purpose of an estate plan is to prepare you and your family for two events: possible incapacity and inevitable death. There are several options for estate planning. Which estate planning elements you choose will be based on the purpose of your estate plan. First, it helps to understand the primary purposes of an estate plan. Here is what you need to know.
Planning for the possibility of incapacity
The legal term “incapacity” means a person’s inability to comprehend the nature and consequences of a legal proceeding. Incapacity can occur as a result of both physical and mental conditions. With estate planning, on the other hand, incapacity is the inability to manage your own affairs and make your own decisions. Consequently, without an estate plan that addresses the potential for incapacity, you may ultimately be appointed a court-supervised guardian or conservator.
Consider using advance medical directives in your estate plan
Advanced medical directives are legal documents that spell out how you want your medical care to be handled in case you are no longer able to make those decisions on your own. Through your advanced medical directive, you can delegate those important decisions to someone you trust. These important estate planning tools can be drafted so they become effective only in the event of your incapacity, even if temporary.
Financial powers of attorney can be part of your estate plan
Decisions regarding your medical care are not the only concern that needs to be addressed. Incapacity can also result in the need for someone to handle your financial affairs as well. A financial power of attorney can be a very useful part of your estate plan because it allows you to choose a trusted individual to handle your financial affairs ahead of time. That way a court will not be required to make that decision for you.
Preparing yourself and your family for your eventual death
Another important purpose of your estate plan is to specify how your estate should be handled after your death. The most common and basic estate planning tools are a last will and testament and a trust. These documents are essentially written instructions about how your estate should be distributed after your death. These also give you the opportunity to appoint a guardian for any minor children you may have. That is important in cases where both parents die at or near the same time, leaving the children without a guardian. The trust also provides protection in case of incapacity.
The basic elements of a proper estate plan
Creating a proper estate plan can be complicated, but with the help of an experienced estate planning attorney, the process will go much more smoothly. There are a few basic elements that should be considered for every estate plan. An estate plan typically includes your instructions for medical care in the event you become disabled or incapacitated during your lifetime. You can identify your chosen guardian for your minor children, as well as set up special provisions for those with special needs. Spendthrift provisions can also be included for heirs who may need additional help managing an inheritance.
If you haven’t started, you should create your estate plan now
In many cases, people are not concerned with estate planning because they believe they are too young or not wealthy enough to need one. The reality is, there is no way to know how long you will live or if you might suffer an illness or injury that leaves you incapacitated. Estate planning needs to be a priority now because, once the unexpected occurs, it could be too late.
Estate planning does not have to be expensive
If the idea of estate planning seems overwhelming or if you believe it will be too expensive, that is not usually the case. While single individuals or small families may only require a last will and testament, power of attorney, and a life insurance policy, frequently additional planning, such as a living trust, will be beneficial. When the needs of your family change, your estate plan can be modified. However, you should consult with an experienced estate planning attorney to obtain the guidance you need. That way, you will have peace of mind, knowing that your family will be protected in the future.