Estate Planning Basics

  Rich people are not the only ones who need to have legal documents like wills, trusts and Power of Attorney documents.  You and I, with only limited assets need to think about many of the same questions that Buckhead Bettys and Bills consider.  Death and disability are not cocktail party topics that we want to deal with. We all like to think we are invincible, but we need to deal with it sooner than you may think.

 

This cheat sheet will help you determine, if and/or when you need to get on board with seeing an attorney to draft your docs.

 

Wills

What it is:

Wills outline your wishes for the assets that you do own at your passing.  Do you want your home/car/bank account/Samsung LCD/signed Bieber poster to go to your parents or your spouse or your brother?  Typically, you do not need to list out everything you own and who you want it to go to, unless you have very specific wishes about a few very specific items.  If you do not have a will, your assets will immediately go to your first family member: Spouse/child/parents/siblings.

 

When to get it:

Absolute must when you have a child.  Strong suggestion when you get married.  It doesn’t hurt to get one out of college.

 

Where to get:

Online resources such as www.legalzoom.com are likely appropriate for simple wills and before complications of marriage and children.  After that, I would typically suggest seeing a younger, lower-priced estate attorney to help you draft.

 

How much:

Don’t pay more than $800 for a will by an attorney.  Purchasing one online will cost about $300.

 

Living Will and Healthcare Power of Attorney

What it is:

A Healthcare Power of Attorney (HPOA) assigns a single person as your healthcare decision maker and the living will outlines your wishes about medical care in the event that you are incapacitated to this person.  Ultimately, you are giving them the power to make the medical decisions on your behalf according to your wishes outlined in the document.  Decisions around life support or specific medical procedures should be yours while you are coherent, not a doctor’s when you are not.  Outline some specific desires in this document to make the medical decisions of your POA easier because you made the directional call.

 

When to get:

It’s easiest to get this at the same time as your will.  Depending on your comfort of having your parents or spouse make all medical decisions for you, immediately.

 

Where to get it:

Online (www.legalzoom.com) is suitable for basic document.  If you have specific requirements that require detailed documentation see an estate attorney.

 

How much:

Price should be included with a will done with an attorney or $150 online.

 

Financial Power of Attorney

 

What is it:

Similar to the Healthcare Power of Attorney, this outlines who you want to make your financial decisions on your behalf should you become incapacitated.  If you do not have this, nobody will have the authority to pay your mortgage or your car bill or your credit card balance or utilities, etc., etc.   So while you are unable to take care of your financial responsibilities, you should assign someone to sign checks and pay bills on your behalf.

 

When to get it:

It’s easiest to get at the same time as your will.  Depending on your comfort of having your parents or spouse make all medical decisions for you, immediately.

 

Where to get it:

Online (www.legalzoom.com) is suitable for basic document.  If you have specific requirements that require detailed documentation see an estate attorney.

 

How much:

Price should be included with a will done with an attorney or $150 online.

 

Trust

What is it:

A trust is a legal entity that can own your assets (while living or at death) and be controlled based on your wishes outlined in the legal document that created the entity.  For example, a trust might be useful if your 2-year-old daughter survived you and your spouse and was now the rightful owner of all your assets (house, bank accounts, retirement accounts, insurance proceeds, etc.).  A trust would allow you to dictate how you wanted your child to benefit from your assets throughout her life.  It is a way to protect assets from being used in a way that you would not see fit if you were in control of them.

 

When to get it:

You only need this if you are worried about the oversight or care of the assets that may be provided at your passing.  Ultimately, you are trusting your heirs to manage and use your assets properly should you pass away.  If you have a sizeable insurance policy or estate and/or children a trust is worth discussing with an attorney.

 

Where to get:

Do not do generic trusts online.  Talk to an attorney to determine the right parameters and language for your situation.

 

How much:

$500-$800 per trust created.