People often procrastinate when it comes to estate planning, and there are a number reasons for this but perhaps the most common one is that they simply don’t know where to start. Though there are many rather complex legal instruments that are used in the field at times the basics of estate planning boil down to transferring assets and making sure that your wishes are known in the event of your incapacitation. We would like to pass along a basic overview to serve as a starting point, but the best way to determine the ideal combination of estate planning instruments for your specific situation would be to consult with an experienced estate planning attorney.
When it comes to transferring assets the most simple and common method for doing so so is the execution of a last will. When you use a last will as your vehicle of asset transfer your estate must pass through the process of probate. People sometimes choose to avoid probate because it can be costly, it takes good bit of time to run its course, and the proceeding is a matter of public record that provides a forum for those who would be interested in challenging your wishes. To avoid probate many people use revocable living trusts to transfer assets because these transfers take place outside of probate.
The basic solution for incapacity planning is the execution of a living will and the appropriate powers of attorney. With a living will you state your preferences regarding the types of medical procedures that you will accept or deny in the event of your incapacitation. In addition, many people will include a durable medical power of attorney appointing someone to make health care decisions for them should they become incapacitated. The reason why both are useful is because a medical scenario may arise that is not specifically addressed in the living will.
Another component that comes into play with regard to possible incapacity is a durable financial power of attorney. With this document you name someone who would be empowered to make financial decisions in your behalf if you were to become unable to make them for yourself.