5 Important Points For Estate Planning

The following is courtesy of Home Helpers of Lake Norman & Central NC. Visit our website at www.lknhomecare.com , or call us at 704.909.7958

 Many people believe that a personal will is all they need to plan their estate.  In reality, there are 5 areas that need to be addressed.  Having your affairs in order takes away the burden that would fall upon family during an already difficult time.  The 5 areas that should be addressed are:

1. Will.  A will is a legally-binding statement directing who will receive your property at your death. If you do not have a will, the state will determine how your property is distributed.

2. Trust.  A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), holds legal title to property for another person, called a "beneficiary." Trusts have one set of beneficiaries during those beneficiaries' lives and another set -- often their children -- who begin to benefit only after the first group has died. There are several different reasons for setting up a trust. The most common reason is to avoid probate. If you establish a revocable living trust that terminates when you die, any property in the trust passes immediately to the beneficiaries. This can save time and money for the beneficiaries.

3. Power of Attorney.  A power of attorney allows a person you appoint, your "attorney-in-fact", to act in your place for financial purposes when and if you ever become incapacitated. In that case, the person you choose will be able to step in and take care of your financial affairs.

4. Medical Directive.  A medical directive may encompass a number of different documents, including a health care proxy, a durable power of attorney for health care, a living will, and medical instructions. The exact document or documents will depend on your state's laws and the choices you make.

5. Beneficiary Designations.  Although not necessarily a part of your estate plan, at the same time you create an estate plan, you should make sure your retirement plan beneficiary designations are up to date. If you don't name a beneficiary, the distribution of benefits may be controlled by state or federal law or according to your particular retirement plan.