If you are a relatively young adult or if you do not believe you have a substantial amount of wealth, you may not think that estate planning is a necessary step for you. However, having a carefully crafted estate plan can be beneficial for anyone. Estate plans involve more than handing out your possessions after you die, though that is a part of it. The following are some important components of a comprehensive estate plan.
A “last will and testament”1 is likely the most recognized estate planning tool. A will can achieve many things – it can name a trusted person to be the executor of your estate, it can designate how certain property will be distributed, and it will limit the power of the court to distribute your property in other ways. Having a will can make the probate process much simpler for your family.
A living trust2 is also essential for many people. A trust can protect your assets from creditors and taxes, can prevent property from having to go through probate, and can place certain conditions on distributions of your property. For example, you do not want to leave a large sum of money to a 20-year-old, as they likely do not have the knowledge or restraint to properly invest or even save it. A trust can help control the distributions until they are older and more experienced.
Powers of Attorney
Some of the most important parts of a comprehensive estate plan do not apply after your death but instead involve the end of your life. You should name a power of attorney who will be in charge of your finances and other affairs if you become incapacitated and unable to do so. You can designate another power of attorney to make important healthcare decisions for you and you can devise a healthcare directive that explains your wishes about end-of-life care.
Contact a Baltimore Estate Planning Attorney for Help Today
All of the above documents are important as injury or illness can happen at any time. At the Law Offices of Randolph Rice, we can help you create an estate plan that is right for you and your situation. Call today at (410) 694-7291 for more information.