As estate planning attorneys, the team at Alvarez Law Group knows when an estate plan is set up for success versus when an estate plan is bound to fail. We often have clients come in who either don’t have a plan at all or have a plan that they’re not confident is doing what they need. Each plan can look different, but we always stress the importance of covering all the basics at the very least.
There is no “one-size-fits-all” estate plan. Your estate, your assets, and your goals with estate planning will shape the actual plan. However, we want to cover four pieces that each estate plan should include regardless of the size of the estate or your goals.
- A Will or Trust
Some people believe that a will or a trust IS an estate plan. While some people may be able to cover all their needs within a will or a trust, these documents are actually just one part of the greater plan.
A will is a simple document that will state what property you have, how you want to distribute it, and who will administer the will (called a personal representative in Florida). These documents are the very base level of estate planning and are most generally useful for people who have smaller estates with few additional specifications needed. However, a will must pass through probate in order to be legally executed. This could expose your assets, beneficiaries, and plans to additional scrutiny. Interested parties will be given the opportunity to contest the details of your will.
A properly-formed and funded trust, on the other hand, will stay out of probate. These documents are more intricate and require additional details about your assets, your plans for those assets, and how/when the transfer of those assets will take place. Unlike a will, a trust can be executed before your death or at a specified date after your death.
For more information about the differences between a will and a trust, check out our May blog.
- Advanced Care Directives
Several estate planning documents fall into this category, but these are integral parts of your plan. Advanced care directives allow you to plan for what happens when you’re incapacitated or otherwise unable to make medical decisions for yourself.
The goal here is to designate a trusted adult to make medical decisions for you when you’re unable to. This can be multiple people or one person. They would need to present proof that they’ve been designated and then would be brought in on those important choices.
Additional directives can include Do Not Resuscitate (DNR) orders and other important information about what you would like to happen during certain medical situations. Ideally, you would never need any of this, but there’s likely to come a day where you will and it’s best to be covered.
- Power of Attorney
Similar to the above, a Power of Attorney makes decisions when you’re unable to. You can have a healthcare power of attorney but you should also cover all your financial needs, as well. This means when you’re incapacitated or otherwise unavailable to take care of your finances somebody else would have the power to do so.
A Power of Attorney must act as a fiduciary which means all decisions they make in their role as a POA must be made for your benefit and not their own. This could mean covering bills, making investments, and allocating funds between accounts as necessary. You will just need to decide how much power this person should have.
- Guardianship
This information only applies if you have children, but it’s important to include guardianship because it’s an important tool to protect your family. A guardianship, similar to Advanced Care Directives, allows for a designated adult (or adults) to care for your children when you’re unable to.
This doesn’t just cover times when you’re incapacitated but also could be relevant for moments where you need to leave the country on business or for pleasure and need someone to take care of your children. These designations allow them to make medical decisions for your children as well as ensure the necessary care is provided when you’re not available.
Bonus: Hire an attorney
You can try a DIY estate plan but there are numerous pitfalls to this. Instead, bring in an experienced estate planning attorney to make sure you don’t end up with a flimsy plan that doesn’t hold up to legal inquiries. At Alvarez Law Group, we pride ourselves on being a small firm that gets big results. Contact us to get your plan done right.
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