When you hear “Estate Planning,” what is the first thing that comes to mind? For most of us, we cannot do the process of distributing physical assets like houses or cars by default. While this is indeed the case, estate planning in general encompasses so much more. It also sets out how a person’s wealth will be preserved, managed, and distributed after their death if they are depreciated.
Planning is everything, and that includes discussing what happens when we all naturally age. Who will be in charge of our affairs? What if I can’t make informed decisions for myself? Where and how should I distribute my money and other assets? It is never too early to begin this process and begin answering these questions.
What is the purpose of a will and why is it important?
A will is a living document that explicitly lists all of the assets and liabilities associated with a particular person. Not only is this document a necessity to ensure that every wish that someone dies is respected – it also guarantees that everything will be divided and distributed as described. This can be limited to one or more people such as spouse, children, friends, or a non-profit organization. A will is also used to appoint a legal guardian to look after minors if necessary.
When should I make a will?
Anyone can make a will at any time, and it is usually best to plan ahead and make a will as soon as you feel the need or when you acquire important assets. Please note that you can update, amend or revoke the will at any time. Certain important life events may also require changes to be made, such as B. Buying a house, getting married or expanding your family with children. This is one of the best times to replace or make additions.
How do I make a will?
Writing a will is neither difficult nor expensive. It takes time and effort, but it’s not as daunting as many may portray it. Here are a few different methods:
Write it yourself. A will is legally binding when you write and sign it. To ensure the document is legally binding, research the law in your state for details. It is best to have a notary public as a witness to avoid problems for your executors in the future.
Use the expertise of a legal advisor. You can always use this option to make sure you don’t miss any relevant details. A paralegal or lawyer will be able to bring up things that you may not have considered. Often times, law firms can also keep these documents safe.
Once your will is written, be sure to keep it in a place that your loved ones and executors can easily find. You can keep it at home with other important documents, preferably in a fireproof box or safe. The key here is to make sure it’s accessible. If the location of the document changes due to a move or an emergency, make sure that the people who need to know where it is can find it without any hassle or hassle.
What is a power of attorney?
A power of attorney is a mandate given by one person (the principal or principal) to another person (the proxy) to represent this person in a lawsuit. In other words, it is the authority to act on behalf of the agent and make decisions when the agent becomes incapacitated.
There are four different types that we will examine.
General power of attorney: In this scenario, the agent can perform almost any act as a principal, such as opening bank accounts and managing personal finances. A general power of attorney regulation loses its validity if the principal becomes incapable of acting, withdraws the power of attorney or dies.
Permanent power of attorney: This particular agreement designates another person to act on behalf of the principal and contains a clause that allows the agent to maintain power of attorney before, during, or after the principal’s incapacity.
Special or limited power of attorney: In this case, the agent has certain powers that are limited to a specific area or category. An example is a power of attorney that gives a person power of attorney to sell their home or property.
Springing Permanent Power of Attorney: Short-term power of attorney is available in some states and takes effect if an unfortunate event occurs that causes the principal to become incapacitated.
What makes a power of attorney valid?
The principal must be mentally capable when signing the power of attorney. The process of witness signing also helps ensure that the document is 100% authentic, that there is no coercion and that everyone involved is competent. You also need to notarize their signatures to further strengthen their credibility.
What is the process of the power of attorney documentation?
Obtain the necessary forms: Either from a local law firm or from a source that provides accurate, legal documents. You can easily find many forms or templates online. You can adapt this documentation to your personal needs.
Fill out the forms thoroughly: If you have any questions or concerns, please feel free to consult an attorney before entering into this agreement. Be sure to read this documentation with your authorized representatives to ensure that everything is concise and clear.
Have the papers notarized: Sign the papers with your agent in the presence of a notary. Local banks and law firms usually have them available. As with wills, make copies of the contract and keep them in a safe place. You should keep all of your estate planning records in one central location.
While these topics are never easy to discuss as you get older, it offers an entirely different level of peace of mind. Informing loved ones of your wishes in advance will make the process smoother and less stressful.