In our previous article about estate planning, we looked at an overview of the most critical elements everyone needs to include in their estate plan. Today, we are breaking it down to take a closer look at some of the financial aspects of estate planning: wills, trusts, and Durable Power of Attorney. Here are a few things to consider as you are preparing your financial plan for the future:

Will

The purpose of this legal document is to list the details of how you want to distribute your assets after death. It also addresses other essential life logistics, such as requests for the care of your children if you still have dependents living at home.

A will is a legally binding document. Writing a will is an essential step to help your heirs avoid disagreements and unnecessary time and money to settle your affairs after you are gone. If you don’t have a will when you pass away, then the decisions about your estate are left to state officials or judges – often resulting in a stressful experience for your family.

While you have the option to prepare a will yourself, it’s best to have the document witnessed. Ideally, working with an estate attorney ensures that everything is in order.

Trust

While a will covers the assets on your property, it doesn’t include other assets outside of the probate estate. You might choose to set up a trust for other significant assets, such as annuities, retirement accounts, and life insurance policies.

A trust gives the title of your assets to a trustee – a designated third party to oversee the distribution of assets to your beneficiaries. Trusts are essential for protecting your legacy, maintaining privacy, and minimizing the amount of money lost to taxes and court fees.

Durable Power of Attorney      

Finally, it is also important to assign a Durable Power of Attorney (DPOA). This step is the process of selecting someone who makes financial decisions on your behalf if you are no longer able to make these decisions yourself due to mental or physical incapacitation. This document authorizes the person of your choice to act on your behalf.

The purpose of a DPOA is to protect your decision-making and independence while also supporting the transition to care when the timing is right. If you don’t have a DPOA and are incapacitated, the decisions default to a court-supervised conservatorship.

Personalized Recommendations for Estate Planning

Estate planning doesn’t have to be complicated when you are working with a trusted representative. For more information and personalized recommendations, contact Shoup Legal at (951) 455-4114 or email us at [email protected].