History tells us thousands of sad stories about siblings fighting over an inheritance that was not appropriately divided. More melancholy stories include legitimate heirs left with nothing but expenses in legal battles. These stories could have had a less heartbreaking ending if the deceased parent had practiced proper planning during his lifetime.
The unpredictability of life reminds you that everything should be planned while you still can. If you are in Denver, you can find a specialized attorney to guide you in preparing documents for your estate-planning needs.
What is Estate Planning?
Your estate involves everything that you own: cars, clothes, cash, jewelry, investments, land, houses, bank accounts, and other possessions. Estate planning is legally documenting your wishes to make sure that the things you own will be awarded to your intended beneficiaries upon your death. It also includes appointing people who will handle your affairs when you become mentally or physically incapacitated. Remember that planning is not exclusive to the wealthy; everyone should do proper planning to make sure that their properties and finances are taken care of according to their wishes after death.
What Happens When You Don’t Have an Estate Plan?
If you did not make an estate plan, the probate would distribute your properties to the beneficiaries that the laws of the state deem rightful. The court will assign your next of kin as your estate administrator who will locate your assets, settle your unpaid bills, and name your beneficiaries. Probate is not only a painfully lengthy process; it can also be very costly. In most states, the court takes about 5-10% of the gross estate to pay for lawyers and conduct the legal processes. Without estate planning, your wishes will not be met and your family will have to endure the anxiety and inconvenience of almost endless court proceedings.
Will vs. Living Trust
A will is a legal document where you designate the person who will get your cash, jewelry, or any property you’ll leave behind. It includes information about you as the executor, your beneficiaries, instructions on when and how the designated beneficiaries will get the assets, and appointed guardians for minors.
A revocable living trust is a legal agreement between three parties: you as the grantor, your beneficiary, and the trustee who will manage the property for your recipient. Properties that are titled in your trust’s name are not required to undergo the probate process. Thus, your beneficiaries will be saved from the costly and lengthy process of property transfer. Unlike the last will that still needs to undergo public validation through probate, the trust remains a private document. It will avoid rivalry among beneficiaries and protect your estate from the excessively interested creditors or media.
Medical and Financial Power of Attorney
This is a legal document where you assign a person to manage your finances or make medical decisions on your behalf when your deteriorating physical and mental state hinders you from handling your affairs. Make sure to select someone who will make every decision tailored to your best interest.
There is no way that you can predict the future. So while you are sound and healthy, do yourself and your family members a favor and create an estate plan now.