Estate planning is often overlooked, avoided, or put off for another day. But the reality is that everyone should have a plan in place. This is especially true if you have children and/or own a home. Please note, though, that an effective estate plan does not have to be overly complicated. Rather, you can start with four key necessities and build on from there. These necessities include a will, durable power of attorney, healthcare power of attorney, and beneficiary designations.
What is a Will?
A will is a specific legal document that becomes operative at the time of your death. You can use a will to accomplish many objectives. Some of the most common include:
- Naming a guardian for minor children,
- Distributing assets and property to loved ones, family members, or charities, and
- Designating a personal representative (who helps carry out your wishes in the will).
Note that a will goes through probate, which is essentially the legal process where a court oversees the will’s execution. The court helps make certain that the executor is acting in accordance with the wishes specified in your will.
If a person dies without a will, that person’s estate is what is called “intestate.” Intestate means that Washington Law of Intestacy dictates how your estate gets distributed, even though that may not be the way you want your estate divided and your property distributed.
What is a Durable Power of Attorney?
A general durable power of attorney authorizes a person to perform several important business tasks on your behalf. Some of these tasks include:
- Buying and selling property,
- Managing bank accounts, bills, and investments,
- Filing tax returns, and
- Applying for government benefits
The person acting on your behalf is known as your agent or attorney-in-fact.
Note that a general power of attorney can go into effect immediately after it’s drafted, or it can only become effective in the event you become incapacitated. If you become incapacitated and don’t have a general durable power of attorney in place, your family may have to go to court to accomplish different business transactions on your behalf.
What is a Healthcare Power of Attorney?
A healthcare power of attorney is a legal document that gives a person (usually referred to as a proxy) the ability to make healthcare decisions on your behalf. The document applies to both:
- End-of-life treatment, and
- Other areas of medical care (for example, undergoing a specific surgery).
Note that with a healthcare power of attorney, a proxy can only act on your behalf if you are unable to do so yourself (for example, if you lost consciousness or lacked mental capacity).
What are Beneficiary Designations?
Beneficiary designations allow you to transfer assets directly to individuals, regardless of the terms of your will. You usually name beneficiaries in such assets as:
- Life insurance policies,
- Retirement accounts, and
- Bank accounts.
You usually name a main beneficiary and an alternate beneficiary. The alternate beneficiary will receive an asset if the main beneficiary predeceases the alternate. When creating your estate plan, you need to make sure that your beneficiaries are named, and the named parties match your current wishes.
Contact The McWilliams Law Group for Help
Our firm provides legal assistance with the following:
- Will drafting, execution and review
- Living Trusts
- Advance healthcare directives (living Wills)
- Powers of attorney
- Estate and gift tax issues
- Guardianships and conservatorships
- Choosing the appropriate executor and/or trustee
The skilled attorneys at our firm can help thoroughly analyze your estate and strategize the best means of transferring your assets, minimizing taxes, establishing guardianship, and supporting philanthropic causes. Contact us now and let us help protect your personal security, family, and legacy.