Hyden, Miron & Foster, PLLC Law Blog

Friday, August 29, 2014

Basics of a Comprehensive Estate Plan

Estate planning is something that everyone should consider.  For many, this subject is not comfortable to think about, but what happens to your assets after you die is not just a concern for those that are aging, wealthy, or have children.  These matters should be handled as early as possible to avoid unpleasantness after a disabling event or death.  Every plan is unique, but there are some cornerstone documents that should be present in every well-rounded estate plan.

Will

A Last Will and Testament disposes of all assets that have not passed to your beneficiaries in another way.  For instance, if you do not designate a beneficiary on your life insurance account it will pass according to your Will.  A Will also nominates the person or persons responsible for administering your estate.  You may also use your Will to nominate a guardian for your minor children and make funeral arrangements. In both instances, the local circuit (probate) court will approve the nominations by formal appointment and will supervise the actions taken by these appointees.

Trusts

There are many different types of trusts that can be utilized depending on your situation.  A trust can be used to reduce estate taxes, hold assets for distribution to beneficiaries according to specific terms, and to protect assets.  A trust allows assets to pass to beneficiaries without the formalities and expense of probating the will.  

Beneficiary Forms

Most financial accounts, such as life insurance and retirement accounts, require that you designate a beneficiary to receive the proceeds of the fund upon your death.  If a beneficiary is properly designated, the asset will pass regardless of the provisions of a will. We urge you to review your designees in your policies, as your current designee may no longer be alive or appropriate, such as your former spouse.

Power of Attorney – Financial and Healthcare

These documents allow you to choose a person to handle your financial and healthcare needs if you cannot do so yourself.  They can be customized to give the agents more or less power as you see fit.  

A financial Power of Attorney is an important element of any estate plan.  It enables your attorney-in-fact or agent to handle your business and financial affairs, other than the assets in your trust, if you are unable to handle them yourself.  

The health care Power of Attorney addresses two major concerns in a single document.  First, as a living will, it sets forth your instructions that, if you should have an incurable illness and death is imminent in any event, your life should not be prolonged by artificial means (i.e., life-sustaining procedures are to be withheld or withdrawn if you are permanently unconscious).  Second, as a durable power of attorney for health care, it authorizes your health care agent to make other health care decisions for you should you be unable to do so.  

Other Things to Consider

You may also want to include a list of assets, including digital assets, with your estate plan, as well as instructions as to how your loved ones can access them.  Be sure to leave your loved ones a list of contacts that they may need in the administration of your estate, such as your attorney and financial advisors.  If you are a homeowner you might also want to leave your beneficiaries a list of all of your utility and service providers for use after your death.

By utilizing all of the above documents you can rest assured that you are on your way to creating a comprehensive plan for your loved ones.  If you are considering creating or revising an estate plan call the attorneys at Hyden, Miron & Foster, PLLC at (501) 376-8222 today. We have offices in Little Rock, Conway and Hot Springs, Arkansas.


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