For most, retirement funding is about as far as they get in terms of later-life planning. However, they often neglect to address what will happen to their assets once they pass away. A proper estate plan is critical to ensuring that your family and loved ones have resources upon your death and that the physical process of resolving those assets and gaining access to them is straightforward and speedy. Below, we outline the essential components of what goes into an estate plan and the process to build one appropriately.
A Will
A will is likely the most common document people tend to associate with estate planning. It serves as a means of distributing your assets upon your passing and must go through probate first. Dying without a will means your assets will be distributed according to Mississippi’s intestate succession rules, which often don’t fall in line with a preferred method of succession. A will also designates a “personal representative” responsible for your bills and asset distribution. Without a will, the state will assign a representative who may or may not fall in line with your wishes.
2. A Trust
A trust separates assets from its owner and holds those assets for beneficiaries. There are several different types of trusts, but oftentimes, the most relevant one for families is a revocable trust.
With this vehicle, you can name a trustee of your choice (often a spouse) to financially care for you with your own assets if you become temporarily or permanently incapacitated. You can also provide the trustee with discretion about how and where to use your assets.
When you die, the trustee can provide for your family by using the assets placed in the trust either during your lifetime or in your will. In doing so, the trustee must follow the specific trust instructions. Placing assets in a trust is also a great way to avoid probate potentially.
3. Power of Attorney
A POA identifies a person of your choosing as an “agent” or “attorney-in-fact” that is legally authorized to make critical medical and welfare decisions on your behalf. Typically, these documents signify a “health care” or “financial” POA. Health care POAs are often created in tandem with a living will or advance directive that outlines the type of treatment you’d want to receive in the event of various medical incidents.
4. Beneficiary Designations
Surprisingly, many people forget to name beneficiaries on essential accounts, including life insurance policies, retirement & bank accounts, and more. Most institutions make this relatively easy, and it is an almost surefire way to ensure your assets pass onto your preferred successor quickly and seamlessly.
It’s also important to understand that a trust can be a beneficiary, and thus, have the assets distributed according to the terms of said trust. Also, beneficiary designations override the distributions outlined in your will.
Lastly, annual review and revision are always a great idea. Life circumstances change, and you’ll want the most up-to-date wishes in your estate plans.
With all of this in mind, estate planning doesn’t have to be an overwhelming process. Working with a knowledgeable and experienced legal team can help you craft the plan that best meets your needs and wishes. Families across Brandon and Jackson trust The Law Offices of Rusty Williard as leaders in Mississippi estate planning. Call (601) 824-9797 to learn more.