If you have been following our blog, you know that drafting a will is an exercise in asset disclosure and distribution. This document provides a specific set of guidelines for disbursing property after one’s passing. While necessary, the will can be seen as just one record in a broader portfolio of life-planning documents. This portfolio of sorts is called an “estate plan.” Not only does one’s estate refer to ownership of items, it also relates to debts owed on possessions and gives powers to others in case of incapacitation.
Typically, three forms accompany the will in the development of an estate plan: the power of attorney, healthcare directive and a trust. If you are considering adding to your estate plan, you will want to be familiar with these components.
Although the word “attorney” appears in its title, power of attorney does not require that you have a lawyer on retainer to determine that all of your financial needs are addressed as you age. Those vested with the power of attorney are given the right to manage certain aspects of a principal’s life. Individuals given a specific power of attorney may manage financial, personal or health matters. Those designated as a general power of attorney have decision-making control on all three issues mentioned. For obvious reasons, it is recommended that the individuals granted this authority be trustworthy.
The state of Georgia has developed its own form for individuals to document their wishes for end-of-life health care. The Georgia Advance Directive for Health Care allows participants to establish a health care agent to act when participants become unable to share their health care wishes. The form also formalizes the medical procedures participants wish to receive.
A trust is an arrangement made in which another person, a trustee, holds property for beneficiaries. The trustee promises to distribute funds to the beneficiaries at an agreed time. Depending on the type of trust, beneficiaries can access funds during the individual’s lifetime or only after death. Benefits of establishing a trust include ease of distribution after death and asset protection.
For many people, developing an estate plan is a natural step to take after drafting a will. While adding to your estate plan may not be as glamorous as increasing acreage on your homestead, developing your estate is a worthwhile investment.