Planning for the future brings peace of mind. But when over 67% of Americans don’t have a will, it leaves loved ones struggling after they pass.
Don’t let your family face a maze of legal issues. Get your affairs in order with essential estate planning documents.
At The Law Offices of Brenton C. McWilliams, we’ve helped Alabamians safeguard their legacies for years. In this article, we’ll go over must-have items to review or create in your estate plan. Having clear directives in place can ease uncertainty down the road.
The Five Estate Planning Must-Haves in 2024
Crafting a complete estate plan involves several moving parts, but five key documents form the foundation of any solid strategy in today’s environment.
These must-have items provide legal protection, clearly capture wishes, minimize taxes, and seamlessly transfer wealth to your beneficiaries and heirs.
#1. Last Will & Testament: Capture Your Final Wishes
A last will is the most well-known document in estate planning. It legally conveys how you want physical possessions and assets distributed after passing.
Key parts of a will include:
- Choosing beneficiaries. Spell out who inherits your property after debts clear.
- Appointing an executor. Name someone to oversee the distribution of your estate, file tax returns, and pay debts.
- Assigning a guardian for dependents. Select someone to care for kids or pets if something happens.
- Making special requests. For example, asking to pass down a beloved family heirloom.
Using a will in your estate plan can help you safeguard your loved ones with a clear roadmap of your wishes.
#2. Living Trusts: Guide Asset Distribution & Avoid Probate
While both will and trusts guide asset distribution, living trusts take effect while you’re still alive. It allows you to designate which assets should be transferred into it now while you are still living, such as real estate, valuable collections, or other items you wish to protect.
Once the assets are securely within the trust, you create clear instructions stipulating exactly how you wish for the trustee you name to distribute those items to intended beneficiaries in the future.
People like revocable living trusts as another means to bypass court intervention after death. Any assets not named to transfer through the trust still go through probate court.
Living trusts often make the most sense when you own substantial property or have complex family situations. There’s more setup on the front end. But the payoff comes later when your trustee simply follows outlined distribution wishes. No lengthy hangups in probate.
#3. Financial & Healthcare Power of Attorney: Who Decides If You Can’t?
Estate planning also tackles tough “what if” questions, like who handles your affairs if an accident leaves you unable to make your own decisions? Medical crisis, injuries, or aging often force us to hand over the reins.
That’s why a financial power of attorney matters. This POA legally appoints someone you trust to act on your behalf regarding financial issues if incapacity prevents you from doing so. They may manage paying bills, accessing your bank accounts, signing tax returns, making investment decisions, or operating your business.
Similarly, a healthcare power of attorney assigns someone to make medical choices following your wishes if you’re unable to. They interface with doctors on end-of-life decisions guided by your living will. Or research treatment options if you face a life-altering diagnosis. Consider naming one person for finances and another for health to avoid overburdening them.
Powers of attorney grant serious authority, so name wisely. Spouses often select each other, but consider back-ups in case your first choice later cannot serve – perhaps your spouse passes before you.
#4. Healthcare Directives: Spell Out Treatment Wishes
Alongside a healthcare POA, advance directives like living wills capture your preferences for end-of-life treatment. Specify if you want measures taken to prolong life regardless of condition.
Outline specific scenarios where you would not want to be resuscitated. Reduce the crushing weight of these decisions for loved ones down the road by making your treatment wishes clear upfront.
#5. Update Beneficiary Designations: Retirement & Life Insurance Accounts
The final piece references assets like life insurance, 401(k)s, and IRAs. These accounts often have separate beneficiary designations rather than simply following your will. And the beneficiaries named directly on the accounts override will specifications.
It’s critical to align your will and account beneficiaries to prevent accidental exclusion. Review the named beneficiaries of retirement accounts, insurance policies, pensions, bank accounts, brokerages, etc., at least annually. Better yet, when major events occur – new family members arrive, marriages change, companies shift 401(k) providers.
Don’t leave asset distribution to chance. Make deliberate choices on beneficiaries across your financial accounts and update as life evolves.
Time for an Estate Plan Checkup
If the thought of outlining so many legal specifics feels overwhelming, you’re not alone. But an estate attorney can simplify the process.
At The Law Offices of Brenton C. McWilliams, we get to know you first, so your plan fits your life.
Estate laws and asset values also change over time. We’ll help you revisit your documents and keep them current. But creating that initial plan removes the heaviest lifting.
While no one likes pondering worst-case scenarios, imagine the peace of mind of knowing your family has clear guides if faced with the unexpected.
Empower your loved ones with a tailored estate plan. With offices located in Daphne, Orange Beach, and Foley, we’ve guided Alabama families to craft legacy plans for years.
Contact us today to request a consultation.