Maybe the word “estate” causes people to think of extravagant mansions, yachts, and multiple overflowing bank accounts. But regarding estate planning, it’s not just the mansion and yacht owners who benefit from legal assistance. Read on to learn how estate planning can benefit people at different income levels.
What Is an Estate Plan?
Planning for an estate means setting down in writing how you want various aspects of your belongings and other matters handled once you’ve died. That can include anything from passing on property such as a house or car; bank accounts; setting up a trust for a family member who’s disabled; or determining who should be the guardian of any minor children if both parents are no longer alive.
Estate plans can be large and complex, like estates themselves. But they can also be simpler processes that smooth things over legally at the time of the testator (person who owned the assets before death) passing.
These types of plans can be as crucial for ensuring that someone gets something you want them to have–and making sure someone else doesn’t get what you don’t want them to have. If someone dies without any estate planning, such as a will, any assets will go to probate court, determining how the assets are distributed.
What Are the Different Estate Planning Tools That Benefit Most Income Levels?
There are several. Often people use more than one tool, depending on their needs.
Last Will and Testament
This is one of the most commonly used forms of estate planning. A last will and testament allows the testator (the person with the estate) to signify how they want the estate handled after their passing. A will is not usually difficult to set up, but there are requirements in Mississippi for a will to be considered legally valid. Working with an experienced estate planning attorney can ensure those requirements are met. Mississippi is also one of the only states that accepts nuncupative (oral) and holographic (handwritten) wills, but there are specific requirements for each.
One important role of the last will and testament is assigning guardianship for any minor children that may be orphaned. If no guardian is appointed in the will, that decision is left up to the courts.
A living will, sometimes referred to as an advance healthcare directive, is something everyone should have. It provides guidelines for what you would or would not want to be done regarding medical interventions when approaching the end of life. While a regular will goes into effect once the testator passes away, a living will is activated when the testator becomes incapacitated and can’t make their wishes known. The living will addresses questions such as whether or not you’d want feeding tubes, artificial respiration, CPR, and other medical treatments meant to sustain life.
Without a living will, those decisions could be made by family members who may either disagree with what you would have wanted or they may disagree with each other, leading to lengthy, costly legal disputes over your care.
Power of Attorney (POA)
A power of attorney (POA) is a legal form that allows someone else to act on your behalf if you become incapacitated. POAs can be used in many different ways, including in business transactions. For estate planning, there are two primary functions.
Healthcare. A healthcare POA is part of the form that must be developed for an advance healthcare directive in Mississippi. It names a person you trust to fulfill the directive’s wishes. It becomes activated once you’ve become incapacitated, not before.
Financial. A financial POA also has a person named as being legally allowed to handle your financial affairs if you become incapacitated. For example, if you’re in a car accident and end up in a coma, the person named in the financial POA can ensure your bills are paid, etc.
The power vested in a POA ends when the testator passes away, and the traditional will is activated.
How Do I Choose an Executor for My Will or Person to be My POA?
This is an important decision and not one to take lightly. You can use different people for executor and POA or the same person for both. But you must be able to trust that they’ll honor your wishes and requests.
Often, one spouse will assign the other spouse to either role. Other times, a different close family member is chosen. However, there are also times when the closest family members may have different values and choices they want to use rather than what you want. If that’s the case, it’s best to choose someone else.
It needs to be someone you feel comfortable discussing these situations with, as they need a full understanding of what you want and what they’ll need to advocate for. They should also be highly detail-oriented as they’ll have a fair amount of paperwork and requirements to work through. While they can live in another location, having someone local could be more convenient if there are meetings or court hearings.
What Can I Do if I Need More Information About Developing an Estate Plan?
Call the Rundlett Law Firm at 601-282-8426 for a free, in-depth, no-obligation case evaluation. We can walk you through the options available for your estate. Every estate is unique, and there’s no one-size-fits-all approach. The important thing is to identify your needs and wishes and take steps to ensure those will be honored.