ESTATE PLANNING, THE BASICS.

 

What exactly is estate planning? Many people are under the misguided conception that estate planning just entails dictating who gets your possessions after you pass away and that is where it ends. Others may think that if they do not have a Will, it is no big deal as their family will be able to tie up any lose ends that you may leave behind. This could not be further from the truth. While there are a wide variety of complex techniques and strategies that can be used when implementing an estate plan, here is more information about the three basic documents that are used while formulating an estate plan.

A Last Will & Testament is the cornerstone of any simple estate plan. A Will dictates a number of important after death items. First and foremost, a Will designates who you want to handle your affairs once you pass away. This person is called the Executor. The Executor handles a number of responsibilities during the process of handling your estate which is known as estate administration. Their primary responsibility, however, is to make sure that your final wishes are carried out based on what is written in your Will. The major importance of a Will is to be able to dictate what those wishes are! Whether you would like to leave everything to your children, in a trust for a grandchild, or to charities. A Will outlines the specifics of those decisions and the specific amounts that you would like to leave to each beneficiary.

The second document that comes into play is an estate plan is a Power of Attorney. A Power of Attorney is a document which will designate a person to govern your finances if you are unable to do so for any reason. The Power of Attorney includes various powers which can include the ability to perform banking tasks and paying bills. A Power of Attorney is effective as soon as you sign the document and lasts until you pass away. Whether you are on vacation and unable to respond to a financial issue or if you are incapacitated for any way, the person designated as your Power of Attorney is given the ability to be able to handle any financial issue that comes up.

The final player in an estate plan is a Healthcare Directive. This document allows another person to make all medical decisions for you if you are unable to do so. It also gives you the opportunity to decide if you would like to be kept alive by extraordinary measures if that time ever comes. Typically, when you go into a hospital for any matter, they will ask you if you have a Healthcare Directive. It is a vital document so that the hospital and doctors can assure that all of the steps they are taking are following your wishes for your healthcare.

As you can see, every one of these documents are plays an important in assuring that your wishes and best interests are always adhered to. Realistically, each of these documents benefits not only your wishes, but your family and friends who will need to deal with all of the ups and downs of whatever issues may come up when the time gets closer to make important decisions. It is important to make sure that all of these decisions are made long before any kind of a crisis comes up. Please call our office today at (973) 256-1927 to set up an appointment to begin making your estate plan today!

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