Aaron Charles Gregg

What a Will Won’t Accomplish

“That last will and testament you have tucked away? It may not be the last word on what happens to your stuff after you are gone. Instead, that legal document’s directives for doling out your wealth may be overruled by other paperwork and relevant laws.”

Everyone needs a will. A last will and testament is how an executor is named to manage your estate, how a guardian is named to care for any minor children and how you give directions for distribution of property. However, not all property passes via your will. You’ll want to know what a will can and cannot do, as well as how assets are distributed outside of a will. This was the topic of “The Legal Limits of Your Will” from AARP Magazine.

Retirement and Pension Accounts

The beneficiaries named on retirement accounts, including 401(k)s, pensions, and IRAs, receive these assets directly. Some states have laws about requiring spouses to receive some or all assets. However, if you don’t keep these beneficiary names updated, the wrong person may receive the asset, like it or not. Don’t expect anyone to willingly give up a surprise windfall. If a primary beneficiary has died and no contingency beneficiary was named, the recipient may also be determined by default terms, which may not be what you have in mind.

Life Insurance Policies.

The beneficiary designations on an insurance policy determine who will receive proceeds upon your death. Laws vary by state, so check with an estate planning attorney to learn what would happen if you died without updating life insurance policies. A simpler strategy is to create a list of all of your financial accounts, determine how they are distributed and update names as necessary.

Note there are exceptions to all rules. If your divorce agreement includes a provision naming your ex as the sole beneficiary, you may not have an option to make a change.

Financial Accounts

Adding another person to your bank account through various means—Payable on Death (POD), Transfer on Death (TOD), or Joint Tenancy with Right of Survivorship (JTWROS)—may generally override a will, but may not be acceptable for all accounts, or to all financial institutions. There are unanticipated consequences of transferring assets this way, including the simplest: once transferred, assets are immediately vulnerable to creditors, divorce proceedings, etc.

Trusts

Trusts are used in estate planning to remove assets from a personal estate and place them in safekeeping for beneficiaries. Once the assets are properly transferred into the trust, their distribution and use are defined by the trust document. The flexibility and variety of trusts makes this a key estate planning tool, regardless of the value of the assets in the estate.

Reference: AARP Magazine (Sep. 29, 2021) “The Legal Limits of Your Will”

Is It Better Not to Have a Will?

“Estate planning is one of the most local areas of the law. It might be second only to criminal law in this respect. This means that the specific rules governing estate planning, testate inheritance and intestate transfers vary widely from state to state, and even sometimes between cities.”

When a person dies, estate and probate law govern how assets are distributed. If the person who has died has a properly prepared will, they have set up a “testate inheritance.” Their last will and testament will guide the distribution of their assets. If they die without a legitimate will, they have an “intestate estate,” as explained in a recent article titled “Testate vs. Intestate: Estate Planning” from Yahoo! Finance.

In an “intestate estate,” assets are distributed according to the laws of inheritance in the specific legal jurisdiction. The decedent’s wishes, or the wishes of their spouse or children, are not considered. The law is the sole determining power. You have no control over what happens to your assets.

Having a will prepared by an experienced estate planning attorney who is familiar with the law and your family’s situation is the best solution. The will must follow certain guidelines, including how many witnesses must be present for it to be executed property. A probate court reviews the will to ensure that it was prepared properly and if there are any doubts, the will can be deemed invalid.

Having a will drafted by an attorney makes it more likely to be deemed valid and enforced by the probate court. It also minimizes the likelihood of illegal or unenforceable provisions in the will.

Debts become problematic. If you owned a home and had unpaid property taxes or a mortgage and gave the house to someone in your will, they must pay the property taxes and either take over the mortgage or get a new mortgage and pay off the prior mortgage before taking ownership of the property. Otherwise, the executor may sell the home, pay the debts and give any remaining money to the heir.

Liabilities reduce inheritances. If someone has a $50,000 debt and very kindly left you $100,000, you’ll only receive $50,000 because the debt must be satisfied before assets are distributed. If the debt is higher than the value of the estate, heirs receive nothing.

Note that a person may use their will to distribute debts in any way they wish. Family members erroneously believe they are “entitled” by their blood relationship to receive an inheritance. This is not true. Anything you own is yours to give in any manner you wish—if you have a will prepared.

Another common problem: estates having fewer assets than expected. Let’s say someone gives a donation of $500,000 to a local charity, but their entire estate is only worth $100,000. In that case, the $100,000 is distributed in a pro-rata basis according to the terms of the will. The generous gift will not be so generous.

If there is no will, the probate code governs distribution of assets, usually based on kinship. Close relatives inherit before distant relatives. The order is typically (but not always, local laws vary) the spouse, children, parents of the decedent, siblings of the decedent, grandparents of the decedent, then nieces, nephews, aunts, uncles and first cousins.

Another reason to have a will: estranged or unidentified heirs. Settling an estate includes notifying all and any potential heirs of a death and they may have legal rights to an inheritance even if they have never met the decedent. Lacking a will, an estate is more vulnerable to challenges from relatives. Relying on state probate law to distribute assets is hurtful to those you love, since it creates a world of trouble for them.

Reference: Yahoo! Finance (Sep. 22, 2021) “Testate vs. Intestate: Estate Planning”

What Is a Living Trust Estate Plan?

“While a Last Will can help ensure that one’s wishes regarding the distribution of their estate upon death are followed, it is the living trust that allows the estate to avoid probate.”

Living trusts are one of the most popular estate planning tools. However, a living trust accomplishes several goals, explains the article “Living trusts allow estates to avoid probate” from The Record Courier. A living trust allows for the management of a beneficiary’s inheritance and may also reduce estate taxes. A person with many heirs or who owns real estate should consider including a living trust in their estate plan.

A trust is a fiduciary relationship, where the person who creates the trust, known as the “grantor,” “settlor,” “trustor” or “trustmaker,” gives the “trustee” the right to hold title to assets to benefit another person. This third person is usually an heir, a beneficiary, or a charity.

With a living trust, the grantor, trustee and beneficiary may be one and the same person. A living trust may be created by one person for that person’s benefit. When the grantor dies, or becomes incapacitated, another person designated by the trust becomes the successor trustee and manages the trust for the benefit of the beneficiary or heir. All of these roles are defined in the trust documents.

The living trust, which is sometimes referred to as an “inter vivos” trust, is created to benefit the grantor while they are living. A grantor can make any and all changes they wish while they are living to their trust (within the law, of course). A testamentary trust is created through a person’s will, and assets are transferred to the trust only when the grantor dies. A testamentary trust is an “irrevocable” trust, and no changes can be made to an irrevocable trust.

There are numerous other trusts used to manage the distribution of wealth and protect assets from taxes. Any trust agreement must identify the name of the trust, the initial trustee and the beneficiaries, as well as the terms of the trust and the name of a successor trustee.

For the trust to achieve its desired outcome, assets must be transferred from the individual to the trust. This is called “funding the trust.” The trust creator typically holds title to assets, but to fund the trust, titled property, like bank and investment accounts, real property or vehicles, are transferred to the trust by changing the name on the title. Personal property that does not have a title is transferred by an assignment of all tangible property to the trustee. An estate planning attorney will be able to help with this process, which can be cumbersome but is completely necessary for the trust to work.

Some assets, like life insurance or retirement accounts, do not need to be transferred to the trust. They use a beneficiary designation, naming a person who will become the owner upon the death of the original owner. These assets do not belong in a trust, unless there are special circumstances.

Reference: The Record Courier (April 3, 2021) “Living trusts allow estates to avoid probate”

Is it Better to Have a Living Will or a Living Trust?

“Whether you need a living will vs. living trust as part of your estate plan depends on your overall financial situation and goals. However, it’s helpful to consider the advantages of including one or both in your planning efforts.”

A living will and a living trust are part of an estate plan that achieves the goals of protecting you while you are living and your loved ones when you have passed. You may need both, but before you make any decision, first know what they are, says the article “Living Will vs. Living Trust” from Yahoo! Finance.

A living will is a legal document used in healthcare decision making. It offers a way for you to provide in exact terms what kind of medical care and treatment you want to receive in end-of-life situations. They are not fun to contemplate, but the alternative is leaving your spouse or children guessing what you would want and living with the consequences. By having a living will prepared properly with your estate planning attorney (to ensure that it is valid), you tell your loved ones what you want. They will not be left guessing or fighting among each other. The treating physicians will also know what you want.

This is different from an advance healthcare directive, which also deals with medical situation but from a different angle. The advance healthcare directive is used to name an agent who will act on your behalf to make medical decisions. It is used in situations other than end-of-life care. Let’s say you are incapacitated by an illness. That person is authorized to make medical care decisions on your behalf.

A trust is a legal entity that lets you transfer assets to the ownership of a trustee and has little to do with your healthcare. The trustee is a person named to be in charge of the trust. He is considered a fiduciary, a legal standard requiring him to put the interest of the trust above his own. A living trust is one of many different kinds of trusts.

Living trusts are also known as “inter vivos” trusts and take effect while you are alive. You (the grantor) are permitted to serve as your own trustee. You should name one or more successor trustees, who can take over just in case something happens to you. You can also name someone else to be the trustee. That is usually a trusted person or a financial institution.

Living trusts may be revocable or irrevocable. When they are revocable, assets transferred to the trust can be moved in and out of the trust as you like, as long as you are alive. You can add assets, remove assets, change the named beneficiaries, or even change the terms of how the assets are managed.

An irrevocable trust is just as it sounds—once it’s created and funded, those assets are permanently inside the trust. There are some states that permit “decanting” of a trust, that is, moving the assets inside a trust to another trust. Your estate planning attorney will know if that is an option for you.

So, do you need a living will or a living trust? You probably need both. The living will deals with your healthcare, while the living trust is all about your assets. Do you need a trust? Most estates will benefit from some kind of a trust. Depending on the type of trust, it may let you protect assets against creditors, give you control postmortem of how and when (or if!) your beneficiaries receive their inheritance, and removes the assets from your taxable estate. Both are important tools in a comprehensive

Reference: Yahoo! Finance (Feb. 18, 2021) “Living Will vs. Living Trust”

What Is an Advance Care Directive?

“Among the greatest gifts you can give your family is completing a medical power of attorney to help guide them, legal and other professionals say, and they note the start of the year is a good time to make this a priority.”

People start out with good intentions at the start of the year, and then fail to follow through. This makes difficult situations even worse for their family. The process begins with discussions about your care wishes, explains the Chicago Tribune’s Daily Southdown in the article “Talk to your family now about advance care directives.”

That conversation should include who you would trust as a health care agent. This person would be named in the medical power of attorney, an advance directive legal document that gives that person the power to make medical and care decisions on your behalf if you are not able to.

That person needs to know, from you, what’s important to you when it comes to quality of life, or length of life.

This is a very important document, as the person has the power to make life and death decisions on your behalf.

It also covers whether you want to be an organ donor. If an unexpected accident occurred and your organs were still healthy and working, would you want to give them to someone who needs a kidney or a heart? If that would be your goal, you need to make your wishes known to your health care proxy and health care providers, as well as to your family.
A living will is also important to have in place. This is used in cases of incurable or irreversible injury, disease, or illness. It expresses your wishes for end-of life care. It gives you the ability to refuse any death-delaying treatment and allow you to die naturally.
These are family matters that should be discussed, but often are not. The topics are hard, as they are centered on our mortality, the mortality of those we love and the reality of death. However, when family members know what their loved one’s wishes are, it provides the family with a tremendous relief.

Without a medical power of attorney or living will, the family may end up fighting over what each member thinks their loved ones wanted. Without clear direction from the family and the correct legal documents, the health care provider must take steps to prolong life, even if that is not what the person wanted.

When naming a health care agent, think about someone who you trust completely. That person will have access to your medical records and be able to approve who else sees them. They may also authorize tests and treatment, decide where you will receive care, which physicians will provide care and whether to accept, withdraw or decline treatment.

Reference: Chicago Tribune’s Daily Southdown (Dec. 30, 2019) “Talk to your family now about advance care directives”

Do Unmarried Couples Need Estate Planning?

“Experts say that creating a plan for what happens to your estate — regardless of how meager or massive your assets — is key for unmarried couples who want their commitment to each other protected in the event of death.”

A couple that has no intention of ever getting married should know that they won’t get the automatic rights and protections that legally wed spouses get, particularly when it comes to death. Therefore, unmarried couples must make a concerted effort to cover all the bases, says CNBC’s recent article entitled “Here’s what happens to your partner if you’re not married and you die.”

The number of unmarried couples who live together reached 18 million in 2016, a 29% increase from 14 million in 2007, according to the Pew Research Center. Among adults age 50 and older, the increase was 75% with roughly 4 million cohabiting in 2016, compared to 2.3 million in 2007.

These couples still face some key differences from their married counterparts. For example, there’s no filing federal taxes as a couple, and if an employer allows health insurance for a partner, the amount the company contributes is taxable to the employee, rather than being tax-free for a spouse.

End-of-life considerations also need attention. Unmarried couples can sign some legal documents that will dictate what happens, if one of them either becomes incapacitated or passes away, which is a type of estate plan.

If you die without a will or intestate, the state probate court will decide how your assets are distributed. A will by itself also won’t address everything. If you want to make sure your tax-advantaged retirement accounts — like your Roth IRA and 401(k) plans — go to your partner, make sure that individual is the designated beneficiary on those accounts. Even if your will says otherwise, whoever’s listed as the beneficiaries on those accounts will get the money. It’s the same for insurance policies and annuities.

If both partner’s names are on checking, savings or investment accounts, the account will pass directly to the surviving partner. However, for an account with only one partner’s name on it, ask the bank about the appropriate form to be completed, so the money is left directly to the surviving partner. This is what’s called a transfer-on-death or payable-on-death designation. Without this designation, the assets will end up in probate and distributed either in accordance with the will or intestacy state laws.

Regardless of how the mortgage is paid or whose name is on the loan, the person named on the deed is the owner. If the house in one partner’s name, it won’t automatically pass to the partner, as it would with a married couple (via joint tenancy with rights of survivorship). It would become part of the probate estate. To remedy this, you can retitle the home, so that both partners are listed as joint owners on the deed, “with rights of survivorship.” Each partner then equally owns the house and is entitled to assume full ownership upon the death of the other. Note that there could be other factors to consider before adding a partner’s name to an existing deed, such as expenses, tax implications and protection from potential creditors. Ask your estate planning or probate attorney before you make a change. A partner owning the house, could leave it to the surviving partner in the will. Remember, though, any asset passing via the will is subject to probate, which may lead to unforeseen issues.

In addition, a partner has no legal say in his or her partner’s medical treatment, if he or she is in a situation where they can’t make decisions for themselves. To give the partner that right, partners can grant each other a durable power of attorney over health care. This allows the partner to make important health-care decisions, if the one in the hospital is unable to do so. This is different from a living will, which states a person’s wishes if they are on life support or suffer from a terminal condition. This document helps guide the agent’s decision-making. If no one is named, medical personnel must follow the instructions in that document.

Likewise, partners may want to give each other durable power of attorney for finances. This would let them handle one another’s money, including accessing accounts as necessary, if the incapacitated partner could not do so. If the partners have dependents, name a guardian for them in the will. Otherwise, that decision will be left to the courts.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

How Did Alzheimer’s Impact the Estate Planning of These Famous People?

“In honor of Alzheimer’s Awareness Month - and the more than five million Americans living with the disease - we highlight our Top 7 Celebrity Estates impacted by Alzheimer’s disease…”

Forbes’ recent article, “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease” looks at seven celebrity estates that were affected by Alzheimer’s disease.

1. Rosa Parks. The civil rights icon died at 92 in 2005. She was living with Alzheimer’s disease. Legal battles over her estate continue to this day. Her estate plan left her assets to a charitable institution she created. However, her nieces and nephews challenged the validity of her will and trust, due to her mental deficiencies and allegations of undue influence. That claim was settled, but there have been fights over broken deals and leaked secrets, claimed mismanagement of her estate and assets, allegations of bribery and corruption and a battle over Rosa’s missing coat that she wore at the time of her famous arrest at the Alabama bus stop in 1955.

2. Gene Wilder. Wilder’s widow–his fourth wife, Karen–and his adopted daughter didn’t fight over Gene’s estate after he died, which shows good estate planning. Wilder makes the list because of how his widow used her husband’s struggle—which she kept private while he was alive—to bring attention to the terrible disease, including permitting his Willy Wonka character to be used in a campaign to raise awareness.

3. Aaron Spelling. The Hollywood producer left behind a reported fortune worth $500 million. His death certificate listed Alzheimer’s disease as a contributing factor. Spelling changed his estate plan just two months before he died, reducing the share to his daughter, actress Tori, and his son, Randy, to $800,000 each.

4. Etta James. Legendary blues singer Etta James passed away in 2012, at 73. Her family said she had been living with Alzheimer’s disease for several years, and her illness ignited an ugly court battle between her husband of more than 40 years and her son from a prior relationship, over the right to make her medical and financial decisions, including control of her $1 million account. Her husband, Artis Mills, alleged that the power of attorney she signed appointing her son as decision-maker was invalid, because she was incompetent when she signed it. Mills sued for control of the money to pay for Etta’s care. After some litigation, Etta’s leukemia was determined to be fatal, which led to a settlement. Mills was granted conservatorship and permitted to control sums up to $350,000 to pay for Etta’s care for the last few months of her life.

5. Peter Falk. The Lieutenant Columbo actor died at 83 in 2011, after living with Alzheimer’s disease for years. His wife Shera and his adopted daughter Catherine fought in court for conservatorship to make his decisions. Shera argued that she had power of attorney and could already legally make Peter’s decisions for him, which included banning daughter Catherine from visits. The judge granted Shera conservatorship, but ordered a visitation schedule for Catherine. However, a doctor, who testified at the hearing, said that Falk’s memory was so bad that he probably wouldn’t even remember the visits.

6. Tom Benson. The billionaire owner of the New Orleans Saints and Pelicans was the subject of a lengthy and bitter court battle over control of his professional sports franchises, and hundreds of millions of dollars of other assets. Prior trusts, that he and his late wife established, left the sports franchises and other business interests to his daughter and two grandchildren. One of granddaughters operated the Saints as lead owner, until she was fired by her grandfather. Tom decided to take the controlling stock of the teams out of the trust and substitute other assets in their place, taking over control of the teams. However, his daughter and grandchildren fought the move. A 2015 court ruling declared Benson to be competent, despite allegations he suffered from Alzheimer’s disease. Benson then changed his will and trust and left everything to his third wife, Gayle. They all settled the dispute in 2017, leaving other assets to the daughter and grandchildren—but ultimately leaving Gayle in control of the Saints and Pelicans, after Benson’s death in 2018 at age 90.

7. Glen Campbell. Campbell’s 2007 estate plan left out three of his adult children. They sued to challenge their disinheritance after he died. They dropped the case in 2018, without receiving a settlement. The fact that Campbell’s final will was drafted several years prior to his Alzheimer’s diagnosis was a critical factor in the outcome of the lawsuit.

The estate planning of these celebrities shows the importance of proper estate planning, before it is too late. Wills and trusts that are created or changed after someone is diagnosed with Alzheimer’s disease, dementia, or similar conditions are more apt to be challenged in court.

Reference: Forbes (November 25, 2019) “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease”

What Should I Keep in Mind, When I Remarry?

“When you remarry, you're not only combining residences with your new spouse, you're also merging your finances. If you have children, it may involve some financial-related stress. For instance, you might need to factor in child support payments or consider whether your new marriage will impact your children's inheritance.”
Before you remarry, discuss any past financial issues with your fiancé, and plan for success, by considering some important ideas.
U.S. News & World Report’s recent article, “6 Financial Considerations for Remarriage,” lists six financial considerations and crucial steps to take before you remarry:
1. Revise Your Budget. Whether this is your first, second, or third marriage, couples need to create a budget for daily spending, monthly expenses and big-ticket purchases. You should also talk about your household expenses and costs related to children from a prior marriage. If you have to pay alimony, let your new spouse know. It’s also a good time to talk about credit card debt, past investments you've made and retirement accounts. You may want to draft a prenuptial agreement.
2. Inform your Fiancé of Any Financial Obligations, Including Child Support. Before getting married, review the laws to see how child support may be impacted by marriage to a new person. While it's unlikely that you would lose your child support if you remarry, the family court may reduce the amount. If a person paying the child support is remarrying, they should talk to their partner prior to the marriage to make certain they understand the amount of the payments.
3. Check Insurance and Benefits. A frequent mistake when remarrying, is not updating the beneficiaries of life insurance policies. You also may have to look at other updates to your coverage, like who will be on your health plan, and you may need to modify your homeowner’s insurance with a spouse and children in residence. Understand that if you get government benefits, like Medicaid or Social Security, you could forfeit your Medicaid eligibility when you remarry if your spouse's income is too high to be eligible. You might also discover that your Social Security benefits from an ex-spouse will stop, after you remarry.
A second marriage may also increase a parent's income for federal financial aid purposes for college. If a parent is the custodial parent for the FAFSA (Free Application for Federal Student Aid), their income now may include their new spouse's income. It is important to discuss saving for college and tuition costs, as well as if either partner has children from a prior marriage, whether each spouse will save money for tuition costs.
5. Estate Planning Is Critical. Check your estate planning before remarrying. That includes a will, medical powers of attorney, do not resuscitate orders, durable powers of attorney, designations of guardianship or consent to adoption and various trusts, including trusts for special needs children. If you have children from a prior relationship, hire a qualified estate planning attorney.
6. Create an Inheritance Plan. If you have children from a prior relationship, you need to put the right estate planning documents in place to protect them from being disinherited. In some states, a last will and testament may be enough, but in others it may make sense to also have a revocable living trust.
The biggest mistake that couples commit when entering their second marriage, is thinking that their own children will inherit any of their estate, if they die first. Perhaps the adult children will inherit some of the estate, but you should speak to an estate attorney to create a customized strategic plan. In many instances, the living spouse will change the plan and leave everything to their children and nothing to yours.
Reference: U.S. News & World Report (November 18, 2019) “6 Financial Considerations for Remarriage”

Should I Use a Trust to Protect My Children’s Inheritance?

“We have approximately $1.5 million in cash and investments, mostly in Certificates of Deposit (CDs). Our mortgage is paid and we have no debt. We have three adult children. Should we put out assets into a trust to better protect them for the future?”
Parents with savings have several options for their children’s future inheritances.
nj.com’s recent article answers this question: “We have $1.5 million. Should we get a trust for our children’s inheritance?” According to the article, parents could create lifetime trusts or trusts in their wills for the benefit of the surviving spouse during the spouse’s lifetime.
After that, they can have the remainder of the assets pass in trusts for each of the children, until they reach a certain age or ages.
A lifetime trust is a type of trust that’s created during an individual's lifetime. This is different from a testamentary trust, which is a trust created after a person's lifetime through the operation of that person's will.
Usually the individual who settles the trust (the "Grantor") will retain control over the assets in the trust, including the right to revoke the assets during his or her lifetime. These forms of lifetime trusts are known as grantor trusts.
Another option is to have these types of trusts continue for the benefit of the grandchildren.
The children’s trusts can have instructions that the assets and income are to be used for the health, maintenance, education and support of the child.
The parents would need to name a trustee or co-trustee. This is the person who’s responsible for investing the assets, filing tax returns and paying taxes (if necessary). He or she will also distribute the assets, according to the terms of the trust.
Trusts are complicated business, so meet with an experienced estate planning attorney to determine the best strategies based on your circumstances and goals.
Reference: nj.com (October 16, 2019) “We have $1.5 million. Should we get a trust for our children’s inheritance?”

What Are My Estate Planning “Must Have’s”?

“Estate planning is not only for the wealthy—everybody can benefit from ensuring their assets and finances are properly taken care of after their death.”
Many people think that having an estate plan just means drafting a will or a trust. However, there’s much more to include in your estate planning to be sure all of your assets are transferred directly to your heirs at your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, if you become incapacitated.
Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate plan should include:
• A will and/or a trust;
• Powers of attorney;
• Beneficiary designations;
• A letter of intent; and
• Guardianship designations.
In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, a lifetime annuity to generate some level of income until death and life insurance to pass money to beneficiaries without probate.
Let's look at each item on this checklist to make sure you haven't left any decisions to chance.
Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don't have a lot of assets. Wills make certain that your assets are distributed according to your instructions. Some trusts also help limit estate taxes or legal challenges. Talk to an experienced estate planning attorney about wills and trusts.
Power Of Attorney. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself. A healthcare power of attorney (HCPA) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.
Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.
Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.
Guardians. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.
Without these designations, a court could order your children to live with a family member you wouldn't have selected, or in some instances, the court could instruct that your children become wards of the state.
A will is a great place to start, but it's only the starting point.
Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”