When you reach a certain age, you need to start thinking about your estate.
You don't need Bill Gates money, either. Even if you have a modest 3/2 in the 'burbs, you have a need for estate planning.
You may be thinking, "Yeah, I have a will, I'm good." But, are you?
There's a difference between the two terms, even if they get used interchangeably. In fact, a will is part of your estate plan checklist.
Never heard of that before?
We're going to explain what an estate plan checklist is, why you need one, and why hiring an attorney is the best way to carry it out.
Difference Between a Will and Estate Planning
First things first: You need to know the difference between a will and estate planning.
An estate plan is a set of legal documents that carry out your wishes in the case of disability or death. A will is one of the documents included in an estate plan.
What Is an Estate Plan Checklist?
An estate plan checklist is exactly what it sounds like. It's a list of things you need to ensure everything you need in your estate plan gets covered. Every estate plan checklist should include:
- Will or trust
- A durable power of attorney
- A healthcare power of attorney
- Any beneficiary designations
- A letter of intent
- Any guardianship designations
You're likely familiar with a will. You may even have one. This is the document that breaks down how you want your assets divided when you pass.
A trust goes into effect as soon as it's created.
Many people try to write a will on their own but if you don't follow specific probate laws in your state, it can get contended in court. Hiring a lawyer is already sounding good, isn't it?
Unfortunately, that in itself can be quite a task to undertake. But, those other documents can become frustrating and complicated quickly, too.
Everything Else in Your Estate Plan Checklist
The most confusing part of an estate plan checklist is the two power of attorneys that get designated. A durable power of attorney is the person who acts on your behalf following your death or if you become incapacitated.
They can carry out real estate sales or make financial decisions on your behalf. In essence, this person handles the legal side of your wishes.
A healthcare power of attorney is the person you assign to make decisions on your health if you become incapacitated.
In both cases, you want to choose someone you trust and who you know will make decisions based on what you would want or think is best.
You're more than welcomed to designate the same person if you'd like. But, keep in mind that having the same POA for both puts a lot of stress and strain on someone.
The beneficiary designations may be the easiest item on your estate plan checklist. If you have a 401(k) plan or life insurance policy, you've likely already named your beneficiaries. But, you do want to double check to make sure and add these people to your estate planning documents.
Think of a letter or intent as a backup to your will. This is a document written to your executor or beneficiary. It just reiterates what your wishes when it comes to a specific asset.
It comes in handy if a court finds your will invalid for any reason or if it gets contested.
Your will or trust may include your guardianship designation, but it doesn't hurt to have a separate document. If you have minor children, this pertains to you. If you don't, you don't have to worry about it.
This is the document that designates who will look after your children in case you become incapacitated or die. You will definitely want to think this over carefully and discuss it with the person/people you select.
Still think you can do this on your own? We're giving you three reasons why you should hire an attorney to handle your estate planning instead.
1. An Attorney Will Make Sure It's Done Right
It's very easy to look at what all the terms mean and think, "Do I need a lawyer for a will? I sure don't!"
But, if you don't have any legal experience, this is a mistake.
The first reason is, even though these terms may seem simple, they're actually very complicated. There are loopholes and laws that affect every one of the documents in your estate plan checklist.
We mentioned that courts can find your will invalid or another family member can show up contesting something you told them when they were 15. A probate lawyer ensures this doesn't happen to the best of their ability.
An experienced attorney executes estate plans for a living. This means they know the ins and outs of your state's laws. They're also up to speed with any addendums to the law or recent updates.
In simple terms, if you hire the right probate attorney, your estate planning will get done right the first time.
2. You Can Save Money
Yes, you will have an initial outlay by hiring an attorney. But in the long run, your estate can save money.
There are different state taxes and other financial benefits your lawyer will be in the know about. They're able to counsel you toward these breaks and benefits.
3. They're Objective
Not only will a probate attorney counsel you about taxes and benefits, but they can also help you name the beneficiaries. Even if they don't know your cousin Susan in Omaha, they'll go step by step with you to ensure she's the right guardian for your children.
They can also guide you with choosing your power of attorneys and beneficiaries. They'll explain in detail what each POA and beneficiary will do.
This helps you to gain a full understanding of the differences between a durable power of attorney and a healthcare power of attorney.
Having an objective, knowledgeable voice during the estate planning process may be the biggest benefit of all. You're going to have a lot of questions that they're able to answer.
Need More Reasons?
If you need another why hiring a probate attorney to carry out your estate plan checklist is your best bet, we got one.
On top of everything else we mentioned, we left out one very important benefit of hiring a lawyer: software. Attorneys have sophisticated software that makes your estate planning go even smoother.
To find out more about estate planning software and how it benefits everyone, visit our blog.