An estate plan is an important set of documents everyone should have. But while most recognize the importance of having a written record of their wishes for how their assets should be divided among heirs, few people are willing to go through the sometimes unpleasant process of thinking about what happens after they pass away. At our office, our team talks to many clients on a daily basis — many of them wanting to know if it is too early or too late for them to begin working on their estate plans. Here are some of the most common questions we hear along with a few important aspects you should consider.
What is the Difference Between a Will and an Estate Plan?
There is often some confusion in connection with the terms “will” and “estate plans”. Both go hand in hand, but these terms are not interchangeable. A will – sometimes referred to as “Last Will and Testament”, is a written document that deals exclusively with what happens to your assets after you die. It can also include your wishes for who should become responsible for your minor children should you pass away. Georgia’s Probate code § 53-2-20 specifies that “every person may make a will unless he is laboring under some legal disability”, i.e., anyone over 14 who is mentally able to write a will is able to do so. A will is an important part of your estate plans, and while it is best to have a will than not, it is but one of the pieces that comprise your estate plans.
A complete estate plan not only includes a will but also includes a set of documents that are effective during your lifetime. Many people prefer to make use of strategies to minimize estate taxes and avoid probate by utilizing key estate planning tools such as revocable trusts, which are created and funded while they are living. Others find it necessary to include a written record of how they wish to be treated should they become temporarily or permanently incapacitated. All of this can be achieved by an effective set of estate plans.
Which Documents Do I Need to Include in My Estate Plans?
We already know that a will is one of the documents in an estate plan. Besides a will, it is recommended that your estate plans include at least a durable power of attorney (which names an agent – usually a relative or someone you trust – to be in charge of your financial matters in case of incapacitation); a healthcare power of attorney (appointing an agent to make medical decisions on your behalf) and an advanced directive (a written record of your preferences for end-of-life care such as your views on being placed on life support and whether you want to receive CPR or not).
In addition, depending on the size and complexity of your estate, you may also want to include any revocable trust documents as well as a list of any financial assets you may have that carry a transfer-on-death/payable-on-death designation as well as any named beneficiaries. Another aspect to consider is adding a digital asset trust which specifies your wishes for what should happen with your electronic assets and social media or email accounts after you pass away. Life insurance policies, annuities, real estate deeds, birth certificates, bank accounts, and papers for stocks, bonds, and mutual funds should also be part of your estate planning documents. If you are unsure of what you should include in your estate plans, visiting an estate planning attorney might be extremely helpful to point you in the right direction.
Do I Need Estate Plans Even if I’m Not Wealthy?
It is a common misconception that writing a will or making estate plans is something reserved only for those with a large list of properties and a high net worth. While it is true that those who have amassed a considerable level of wealth need to dedicate a lot of time and attention to their estate plans, this process can also benefit someone who may just be starting out their career or thinking about having a family.
Estate planning is a flexible process, and the tools you may need can be changed or adapted according to your circumstances. Regardless of your financial situation, it is important to have a written document that can help your loved ones make important decisions for you if you become incapacitated for any reason (such as an auto accident or unexpected illness). A complete set of estate plans not only addresses what happens with your property after you die but also how you wish to be treated while you are still living. For that reason, anyone – from a college student to a retiree – should consider having estate plans in place.
How Soon Should I Begin the Process of Making My Estate Plans?
The short answer is that you should begin as soon as you can. Because tomorrow is not guaranteed for anyone, having at least the four basic estate planning documents (a will, a power of attorney, a healthcare directive, and an advanced directive) is extremely important for everyone regardless of their age. As things change and evolve in your life, you should revise and update your plans accordingly, but starting with these basic documents is a great first step. If you are unsure of how to get started or would like to get help from a seasoned team of estate planning attorneys, contact Oren Ross & Associates for a free in-depth consultation today!