To dispel a common misperception, estate planning is not only for the wealthy. A basic estate plan is necessary for everyone, regardless of income or assets, because we all want to minimize costs, confusion, and stress for loved ones after a death. If you do not make your own plan, your assets will pass under laws created by the State of Ohio.
At a minimum, everyone should have the following four items:
1. A current will or trust. Everyone should have a will. A revocable living trust is appropriate for some, particularly for parents with minor children or those who own property out of state. A trust can help avoid probate, which helps beneficiaries gain assets more quickly, saves time, court costs, and increases privacy by not becoming public records at the probate court.
2. A durable power of attorney. A durable power of attorney allows someone else to make financial and legal decisions if a person becomes hospitalized, disabled, or otherwise incapacitated.
3. Advanced health care directives. I recommend everyone have a health care power of attorney and living will in place. These two documents work together to allow an agent to make medical decisions if the person who creates the document is unable to communicate their own medical wishes. The living will primarily involves end of life decisions while the health care power of attorney allows the agent to obtain medical information and make medical decisions on your behalf.
4. Updated beneficiary forms. Beneficiary designation forms on life insurance policies, 401(k) accounts and other assets will generally override any conflicting provisions in a will or trust. It is essential to make sure all beneficiary designation forms are checked and regularly updated.
I can help create or update these basic items as well as provide suggestions for additional steps, if needed. Please call or email me to schedule a meeting.