Wills, Trusts, and More: The Essential Estate Planning Documents Explained
June 15, 2023
Planning for the future can be daunting, but it doesn’t have to be. Whether you’re a young professional just starting your career or a retiree looking to secure your legacy, estate planning is essential to ensuring your financial future and safeguarding your loved ones. It’s important to understand what it is so you can make informed decisions about protecting what matters most.
Introduction to Estate Planning
Estate plans can vary greatly from person to person and should be tailored to your specific situation. Essentially though, estate planning is making arrangements for the management and ultimate distribution of your property and assets during any periods of incapacity as well as after your passing. It usually involves creating a will, trust, or other financial documents, such as powers of attorney. It can be a complex or relatively straightforward process but ensuring that your affairs are handled if you are incapacitated and your wishes are fulfilled after your death is important. If you are considering creating estate planning documents in Wisconsin, an experienced attorney can help you create an estate plan that meets your needs and protects your interests.
What is a Will?
A will is a legal document that outlines an individual’s wishes for how their probate property and assets should be distributed after death. It can also be used to appoint a guardian for minor children and pets. A will governs only assets which would be subject to probate, meaning those assets which are not held in Trust and which do not already have beneficiary designations.
What is a Trust?
A trust is a legal arrangement in which the grantor, or person who creates the trust, transfers assets to another party (the trustee). The trustee does not take ownership but instead holds property or assets for the benefit of another party (the beneficiary). Trusts are used for various purposes, the most common of which is to avoid having to go through the probate process. Other uses for trusts include estate tax planning, asset protection, and charitable giving.
Other Essential Estate Planning Documents
While a will and trust are the most critical components of an estate plan, many also choose to draft additional documents that will affect their lives. One reason clients decide to do this is that if they become incapacitated or unable to make decisions with a clear mind, they can still express their wishes. Common additional documents include:
1. Durable Financial and/or General Power of Attorney: This document appoints someone to make financial decisions or manage your assets on your behalf. A durable financial or general power of attorney remains effective if you become incapacitated during your lifetime but will terminate upon your passing.
2. Medical Power of Attorney/Advanced Health Care Directive/Living Will: These documents all indicate decisions made in a medical emergency where you cannot communicate for yourself. A Living Will explains your wishes, a Medical Power of Attorney assigns a person of your choosing to make decisions regarding your health only if you are declared incapacitated, and an Advanced Health Care Directive combines the two. Estate planning can give you peace of mind. Knowing that your affairs are in order, your loved ones will be taken care of after you die and that you have clearly and legally expressed your wishes in case of an emergency can provide a great deal of comfort. Contact Bakke Norman today to speak to our estate planning attorneys.