Five Components of an Estate Plan

Five Components of an Estate Plan

Everyone should have an estate plan, even if you don’t own many significant assets. Estate planning is a way to ensure that your property and other assets are distributed according to your wishes. It’s also the best way to declare your healthcare wishes and make sure someone is taking care of your finances in case you’re incapacitated.

If you don’t have an estate plan, any assets you own at the time of your death that don’t have “designated beneficiaries” will go through probate and be distributed according to Ohio intestacy law. This can be a time-consuming and emotionally difficult process for your surviving family. To ensure that your wishes are carried out and your loved ones are protected, let Dworken & Bernstein help you create a comprehensive estate plan.

Here are the five main components of a basic estate plan:

  1. Will: Wills are the most common estate planning tool available. Your will should distribute all your assets and make provisions for any “leftover” assets not covered in the will, such as if you inherit a piece of real estate and die before you can update your estate plan. Wills also allow the testator to designate guardians for minor or disabled children. They can also address pets.
  2. Trusts: Trusts allow the creators (trustors) to shield their assets from probate, enabling the beneficiaries to receive their inheritance faster. The trustor designates a trustee to oversee the distribution of the assets, and can include conditions for use. For example, someone forming a trust may create it for the purposes of funding grandchildren’s higher education goals, supporting a child, or even caring for a pet.
  3. Advance healthcare directive: An advance healthcare directive outlines your wishes for your medical care in the event that you cannot verbalize them yourself. The directive is usually carried out by your medical power of attorney. This often includes “living wills” which provide that you are simply kept comfortable under certain circumstances.
  4. Powers of attorney: A good estate plan should also designate powers of attorney. These are trusted agents who act on your behalf when you are unable to do so. There are two broad categories: financial and medical. Financial powers of attorney can pay bills, file taxes and carry out other necessary tasks, while medical powers of attorney advocate for your healthcare needs.
  5. Beneficiary designations: Finally, you should list beneficiaries for retirement accounts, life insurance policies and other relevant accounts, including who should receive the funds or assets when you die.

Dworken & Bernstein can help you create and update your own custom estate plan. Call today for a consultation.

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