Did you know 67% of Americans have no estate plan?
That’s a surprisingly high number, considering how crucial it is to have one in place. Estate planning in Utah isn’t just about who gets your stuff, it’s about making sure your family isn’t left guessing and grappling with legal hurdles during an already tough time.
When you bypass an estate plan, you leave the distribution of your assets, and even decisions about your healthcare, up to state laws or the courts. Having one gives you the peace of knowing your wishes will be followed and your loved ones taken care of.With this in mind, let’s dive into the key estate planning documents that are essential to any thorough estate plan, brought to you by seasoned estate planning attorneys in Utah.
1. Wills and Trusts
A will or trust might seem like fancy formalities meant only for the rich, but that’s not the case. Everyone should consider them, even if you don’t have a huge number of assets.
Wills and trusts make sure your estate goes where you want it after you’ve passed. Additionally, they can help you avoid high estate taxes and legal headaches.
But just having a will or trust isn’t enough- you must be careful with the details. For example, if you have named your sister as the beneficiary on your retirement account or insurance policy (which passes directly to her, outside your will), you shouldn’t promise these same things to someone else in your will. Doing this can spark a family feud and drag everyone to court, which is probably the last thing you’d want.
2. Power of Attorney
A power of attorney, or POA, allows you to designate someone to manage different aspects of your life when you cannot. There are a few different kinds:
- A general POA gives someone the authority to handle your legal and financial affairs- like selling your stocks or closing bank accounts.
- A limited POA is more specific. You use it to authorize someone to act on your behalf for certain tasks or a set period. It’s not widely used in estate planning because of its narrow scope.
- A durable POA stays in effect even if you become incapacitated. Basically, it keeps your chosen person in charge no matter what happens.
Pro Tip: If you’re single, having a POA is non-negotiable. Without a spouse to step in automatically, a court could end up deciding who handles your affairs. And they might not pick the person you would have chosen.
3. Advanced Healthcare Directive
Imagine a situation where you cannot make medical decisions for yourself. That’s where an advanced healthcare directive comes into play. As a crucial estate planning tool, it makes sure your medical wishes are followed if you’re ever incapacitated.
With an advanced directive, you can:
Name a healthcare agent, also known as a durable power of attorney for healthcare. Here, you appoint someone to make medical decisions on your behalf. You can choose anyone you trust for this role, whether it’s a family member, a friend, or someone else close to you.
Specify the kind of medical care you want (or don’t want). From decisions about life-sustaining treatments to handling terminal illnesses, you can make your preferences clear ahead of time.
4. Beneficiary Designations
When you set up things like retirement accounts or life insurance policies, you’re asked to name someone who will receive the benefits once you pass away. Whoever you name as beneficiary on these accounts will get the assets, no matter what your will says.
Let’s say you name your spouse as the beneficiary, but then you two split and remarry. If you update your will to leave everything to your new spouse but forget to update those beneficiary designations, your ex could still end up with your retirement funds- even if your will says otherwise.
It’s a good idea to regularly review your beneficiary designations with your estate planning attorney in Layton—think at least once a year or after big life changes like a marriage, divorce, or the birth of a child.
If you forget to name a beneficiary or if the person you named can’t accept the benefits, a court might have to step in and figure out what to do with your funds. And frankly, a judge who doesn’t know your situation, beliefs, or intent is unlikely to make the same decisions as you.
5. Guardianship Designations
Choosing a guardian for your minor kids may not be the first thing on your mind when you’re setting up your estate plan. However, guardianship appointments can ensure your kids are cared for by someone you trust if something happens to you and your partner.
Some wills or trusts automatically cover this, but not all do. You want to pick someone who shares your values, is financially stable, and is fine with raising your kids. It’s a big ask, so make sure you choose wisely.
Without these designations, the court can end up deciding who takes care of your kids. Worse still, your children can become wards of the state. So, take a moment to think about who you trust to raise your kids if you can’t be there, and lay down your choices in writing.
6. Letter of Intent
A letter of intent isn’t legally binding, but it’s a great way to communicate your wishes and offer some guidance on how you want things handled. Think of it as your chance to explain decisions, give instructions about your funeral, or share some personal thoughts.
Losing a loved one is tough, but having a letter from them can bring a lot of comfort. Your words can offer reassurance, love, and guidance during a difficult time, helping your family feel connected to you even after you’re gone.
The Bottom Line
That’s our take on the six most essential estate planning tools you must have. Remember, you can’t just draft these documents and call it a day. You’ll also need to understand how each piece fits together.
Sure, you could try to figure it all out on your own, but why do it alone when you can have experts in your corner? Working with an estate planning attorney and a financial advisor ensures that everything is done right, and your wishes are crystal clear.
The Utah estate planning lawyers at Jeremy Atwood Law are committed to protecting your assets and making your estate planning journey as stress-free as possible. Call us today to set your plans in motion and make sure your wishes are honored.