durable power of attorney
by Admin
Posted on 07-06-2024 03:21 PM
It's essential to draft a durable power of attorney (poa), so an agent or a person you assign will act on your behalf when you cannot do so yourself. Absent a power of attorney, a court may be left to decide what happens to your assets if you are found to be mentally incompetent, and the court's decision may not be what you wanted. This document can give your agent the power to transact real estate, enter into financial transactions, and make other legal decisions as if they were you. This type of poa is revocable by the principal at a time of their choosing, typically when the principal is deemed to be physically able, mentally competent, or upon death.
Geerdes notes there’s one final document in your estate plan that helps protect you during your life: a durable financial power of attorney. This document lets you name a trusted individual to make legal and financial decisions on your behalf if you’re unable to do so. The “durable” in the name means that the power of attorney stays in force should you become incapacitated—physically or mentally.
Your beneficiaries are key
Now that we’ve got those definitions out of the way and hopefully convinced you that you need an estate plan, it’s time to jump right into the main topic. Estate plans are all unique.
To determine the most essential documents for your estate plan, you need to answer questions such as the ones below. These will help you figure out where to start. What asset type or asset size do you own?
what is the amount of estate taxes needed to transfer property ownership?
what is your financial situation at the moment? what key financial decisions do you need to make?
who are the potential beneficiaries or contingent beneficiaries for your estate?.
This series focuses on the essential concepts every estate planner needs to know in order to begin advising estate planning clients and drafting estate planning documents. Attendees will gain knowledge of the key documents in an estate plan, how they are structured, and why they are important. Topics will include: when to use a revocable trust and why; special considerations when planning for spouses, descendants, and other beneficiaries; testamentary trusts; and lifetime planning. A variety of estate planning documents will be covered, along with drafting tips and examples. Over the eight-week course, attendees will learn how property passes at death and how estate planning documents operate.
Consider your non-retirement accounts
Certain assets, such as your retirement accounts and insurance policies, require you to name a beneficiary who will inherit the account when you die. That ensures those assets will go directly to your beneficiaries after you die, outside of probate. Beneficiary designations usually supersede instructions in your will or living trust, so it’s critical to get them right, says letha mcdowell , an attorney with the hook law center and president of the national academy of elder law attorneys. You should also name contingent beneficiaries in case you and the primary beneficiary — usually your spouse — die simultaneously or within a short period of time, mcdowell says.
First off, said nerdwallet , you will want to make an inventory, as doing so is a "good way to get a handle on your tangible and intangible assets. " tangible assets include things like "homes, land or other real estate," while intangible assets are things like checking and savings accounts, retirement accounts and investments. Also make note of "any liabilities you may have outstanding," such as a mortgage or student loans. If you do not yet have a will, it is vital to create one. You can tackle this task on your own — "several software programs are available to assist you, as are various diy websites," said investopedia — or you can hire a professional to help.
Your estate administrator or executor will be in charge of administering your will when you die. It is important that you select an individual who is responsible and competent to make decisions. Your spouse is not necessarily the best choice. Think about how the emotions related to your death will affect this person's decision-making ability. If you foresee any issues, consider other qualified individuals. You might name a close friend or another family member who you trust to act impartially on your behalf.
For most people, a california living trust lies at the heart of their estate plan. Sometimes, attorneys will create separate living trusts for spouses, and sometimes joint trusts, depending on their circumstances. This type of trust is called “living,” because it goes into effect and protects you even while you are alive. It also lives on past your own death, and in some cases, beyond the death of your immediate heirs. A living trust is a legally defined “box” into which you place certain kinds of assets so that you and your “successor trustees” have control over those assets.