What is an Estate Plan? While it sounds very grand, it’s often just a Last Will and Testament or a Family Trust. In this Introduction to Estate Planning, we want to explain the basics of the process.
We tend to think of Estate Plans as being something only for the rich and famous. However, the reality is that everyone has an Estate Plan, whether or not it’s of your own making.Simple Wills
If you have a Last Will and Testament, that is the heart of your Estate Plan. It does just three things. First, it specifies who is to inherit your property. Then, your plan tells who will take care of any minor children (if you have any). Finally, it indicates who is to be your Executor to make sure your wishes are carried out.
You can add a Power of Attorney and a Living Will to your Last Will and Testament. These additional documents will enable your affairs and well-being to be taken care of if you become incapacitated.
These three documents — your Will, a Power of Attorney, and your Living Will — make a good basic Estate Plan.Family Trust / Living Trust
However, if you want to avoid probate when you pass away, a Family Trust or a Living Trust will involve a more detailed Estate Plan. That plan will include a Will, Power of Attorney, and a Living Will, plus the Family Trust Agreement, plus a few other related documents. And not only will your Family Trust avoid probate, it will provide far greater flexibility in the management of the inheritance being left to your family.What if You Have No Estate Plan?
But even if you have neither a Will, nor a Family Trust, you still have an Estate Plan.
If you die with neither a Will, nor a Trust, the state of Idaho makes your decisions for you. It dictates who is to inherit your property and who has priority to serve as your Executor.
Unfortunately, this state-dictated Estate Plan is probably not the one that you would have designed on your own. But where you have neglected to express your own preferences, the state determines how your affairs should be handled.Conclusion
Where a person passes away who has not taken the time to have a Will or a Trust prepared, the state of Idaho dictates who is to inherit his or her property and who has priority to serve as the Executor of the estate.
Unfortunately, since one size rarely fits all, this state-dictated Estate Plan is probably not the one that the person would have designed on his or her own. But where a person has neglected to express his or her own preferences with the requisite formalities, the state makes its best guess as to how things should be handled.
Far better is an Estate Plan of your own making.
So don’t be put off by the title “Estate Planning.” It really is for everyone.