Most of the time people believe that their estate is all “set-up,” even though most of the time it is not. It’s just the process of having gone to an attorney for a plan, like the couple above.
Much of the failure of estate planning is the misunderstanding of consequences. Often, a legal hearing is required to take control over family member’s financial and medical decisions when planning is no longer possible. Probate is the court procedure that interprets the Last Will and Testament or follows the rules of asset transfers when the documents aren’t available. Probate could easily be avoided through proper estate planning.
The following documents are covered under the definition of basic estate planning.
1. Power of Attorney; this is the document that provides authority to enable others to make financial decisions for the benefit of the one who set-up the Power of Attorney.
2. Health Care Surrogate; This is the document that provides authority to a trusted party to make health care decisions for the benefit of the grantor if and when unable to make such decisions.
3. Living Will; This is the document that provides authority to enable a trusted party to make end-of-life decisions.
4. Revocable (Living) Trust; this is a document that control’s how assets are to be handled during one’s lifetime and after death. The trust-maker has the ability to make changes during one’s life.
5. Last Will and Testament. This is the document that handles assets at death and assets that are not properly funded by the trust through the court process called probate.