Will's or Trust
Durable Power of attorney
Letter of Intent
Medical Power of attorney
Guardianship of designations
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6 Documents to include in your plan....
Will's & Trusts
Many people hear the words Will or Trust and think its a long complicated process or expensive - Something only rich people have. That is a incorrect assesment. A will or trust is one of the main componets of every estate plan, even if you don't own substantial assets. Having a will or trust in place will insure property is distribuated according to your wishes. Using a trust can sometimes help limit estate taxes or other legal challenges. However, it dosent stop with just having a will.
Durable Power of Attorney
It's absolutly essential to execute a Durable Power of Attorney (POA) so the agent or person you assign will be able to legally act on your behalf when you cannot do so yourself. With out electing a Power of attorney, a court may be left to decide what happens to your assets if you are found to be mentally incompetent, and the courts decision may not be your wishes and what you wanted.
A number of posessions can pass to your heirs without being dictated in the will. (such as 401(k) plan assets) This is why its important to maintaining a beneficiary as well as a contingent beneficary on such account. If you do not name a beneficiary, or the beneficiary is deceased or unable to serve, a court will be left to decide the fate of your funds. Often times a judge will be unaware of your situation, beliefs, or intent is unlikely to make the same decision you would have made.
Letter of Intent
A letter of intent is simply a document you will leave with your executor or beneficiary. The purpose of this letter would be to defind what you want to be done with particular assets after your death or incapacitation. Some letters of intent may also provide funeral details or special requests. While this letter of intent may not be valid in the eyes of the law, it does help inform a probate judge of your intentions and may aid help in the distribution of your assets if the will is deemed invalid for some unexpected reason.
Healthcare Power of attorney
A Heathcare power of attorney (HCPA) designates another individual (typically a spouce or family member) to make important healthcare decisions on your behalf in the event of incapacity. When choosing an agent to handle these medical decisions, you should pick someonen you trust, who shares your views, and would recommend a couse of action you would typically choose yourself. This person should have a solid understanding of your wishes as your life could be left in their hands. In addition to your first agent, a backup agent should also be indentified if your initial agent is unavailable or unable to act at that time needed. A Heathcare power of attorney goes farther than a living will. The big restriction with living will's is that it only applies if you are terminally ill or permanently unconscious or another similar conditions per your state law. If you are only temporarily unconscious or otherwise unable to communicate, but are not terminally ill, in a permanent vegetative stage, or other end-stage condition, a living will is of no use. You need a healthcare power of attorney to cover such a situation. Some states do allow you to combined into one document. * A durable power of attorney remains in effect even after you are unable to make decisions for yourself. Non-durable allows your agent to make decisions on your behalf however, once you become incapacitated the powers of the agent will cease.
Guardianship of designations
While some wills or trusts may incororate this clause, some don't. This simply shares your wishes when it comes to your minor children or children you may concider having later. Picking a guardian is important and sometimes gets overlooked or forgotten about. Make sure the individual or couple you choose share your same views, is financially sound, and willing to raise your children. As with all designations, a alternate guardian should also be named. Absent of the designations you choose, a court could rule your children to live with a family member you shouldn't have selected yourself. In certain extream cases, the courts could mandate that your children become wards of the state.
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