Estate Planning Basics - Planning for the Unexpected
You have been planning for months for the arrival of your new baby. You have assembled furniture, painted rooms, and made sure you did not forget anything for the newest member of your family. You have planned for everything, or have you?
A recent study found that 50% of Americans with children do not have a will. For new parents, planning for the unexpected is always the last thing on their mind, but dealing with the difficult situations head on is often what parenthood is all about. In particular, a will goes beyond just designating who will inherit your assets, it can also designate who will be the guardian of your child should something happen to both parents.
An estate plan is for everyone not just for the retired, and not just for “the wealthy.” Unfortunately, we cannot predict how long we will live, and illness and accidents happen to people of all ages. In addition, good estate planning often means more to families with modest assets, because they cannot afford to lose anything.
Estate planning does not have to be expensive. If you don’t think you can afford a complex estate plan now, start with what you can afford. For a young family or single adult, that may mean a will, term life insurance, and powers of attorney for your assets and health care decisions. Then, let your planning develop and expand as your needs change and your financial situation improves. Don’t try to do this yourself to save money. An experienced attorney will be able to provide critical guidance and peace of mind that your documents are prepared properly.
What is an estate plan?
It is the making of a plan in advance and naming whom you want to receive what you own after you pass. However, good estate planning is much more and should include:
A guardian and an inheritance manager for minor children.
Instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
Instructions for your care if you become disabled before you die.
Provide for family members with special needs without disrupting government benefits.
Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce.
Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
Provide for the transfer of your business at your retirement, disability, or death.
Minimize taxes, court costs, and unnecessary legal fees.
Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.
What is a will?
A will is the legal instrument that permits a person, to make decisions on how his estate will be managed and distributed after his or her passing. A will serves a variety of important purposes. It enables a person to select his heirs rather than allowing state laws to choose the heirs. A will allows a person to decide which individual could best serve as the executor of his estate, distributing the property fairly to the beneficiaries while protecting their interests. Finally, and most importantly, a will safeguards a person's right to select an individual to serve as guardian to raise his or her young children in the event of his or her death.
What is a Power of Attorney?
A Power of Attorney ("POA") is written document that allows you (the principal) to appoint another person to act as an agent on your behalf, thus allowing the agent to perform certain acts or functions on your behalf. The POA generally terminates when you terminate the POA, when you die, or when you become incompetent.
A special type of Power of Attorney that is used frequently is the "durable" power of attorney. A durable POA differs from a traditional POA in that it continues the agency relationship beyond your incapacity. The two types of durable POA are immediate and "springing." The immediate takes effect as soon as the durable POA is executed. The "springing" POA does not take effect until a specific event occurs, such as the disability of the principal. Most often, durable powers of attorney are created to deal with decisions involving either property management or health care. Durable powers of attorney can easily and inexpensively handle your affairs after you become incapacitated.
No one likes to think about their own morality, but you do not want the state to determine what happens to your loved ones and your assets. Knowing you have a properly prepared plan will give you and your family the peace of mind you need.
Are you ready to create a custom, simple, estate plan to make sure your children are taken care of if you aren't there? John Wang's goal is to provide parents excellent planning at a great price. remember, what your nearest and dearest want most from you now is your love. That is the most precious gift you can give. Whether you are making an estate plan for the first time or revising your existing estate planning documents, John Wang will help you get started. Simply use PROMO CODE: EASY and receive 10% discount off his services.
John C. Wang
John C. Wang is a founding partner of Salas Wang LLC who concentrates his practice in Estate Planning and Immigration Law. Whether you are married or single, just starting out or looking back on a life well-lived, John can help you create an estate plan that will help achieve your goals for your loved ones today.
John holds a J.D. from DePaul University College of Law where he was the International Law Society Vice President and a member of the Intellectual Property Law Society, Student Advocate Program, and the Asian Pacific American Law School Association. John also holds a Bachelor of Science in Mechanical Engineering from Bradley University in Peoria, Illinois.
Disclosure Policy: This post was sponsored by Salas Wang LLC. The opinions are completely my own based on my experience.