You value the ability to make your own decisions regarding your finances, property, health care decisions and raising your children. If you should die or become incapacitated, you hope others will handle these matters for you according to your wishes.
Simple state planning makes it possible for you to ensure that your wishes will be followed.
A will is a written instrument that lets you designate:
• Who will receive your estate (your property that does not pass by beneficiary designation or joint ownership arrangement) after you die
• Who will raise your children if you die while they’re still minors and your spouse is unavailable to care for them
• Who will serve as your personal representative – that is, the person who will pay your bills and taxes and distribute the rest of the estate to your beneficiaries.
It’s time to write a will if you have accumulated assets and you care who will receive those assets after you die.
If you have minor children, you should definitely have a will. In your will you can name the person you want to raise your children if something should happen to you and your spouse.
If you’re a young adult who has no children and owns a few possessions, you probably don’t need a will yet.
Devising an estate plan today can help prevent hassles for your family in the future.
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If you die without a will, the court will appoint a personal representative to distribute your entire estate to your surviving spouse – unless you have children from outside your current marriage. If this is the case, your spouse will retain half the marital property and will receive half of your individual property and the rest of your estate will be split equally among all of your children from this marriage and outside of it.
If you have no surviving spouse, children or descendants of children when you die, your estate will go to other surviving relatives. State law lists the order of inheritance as follows:
• Brothers and sisters
• Nieces and nephews
• Descendants of grandparents
The state school fund will receive your assets if you leave no heirs closer than descendants of your grandparents.
• Survivorship marital property – goes directly to a surviving spouse, such as a house that has both spouse’s names (and only their names) in the title
• Property that is jointly owned – goes to the surviving owner(s)
• Life insurance proceeds and funds in IRAs and other retirement plans – go directly to beneficiaries you listed on the appropriate forms
• Transfer on Death (TOD) and Payable on Death (POD) assets and accounts – go directly to the beneficiaries named on the account or deed
You may think you have no need for a will if all your property falls into the above categories and you have no minor children. You may be correct, but a will may still be wise.
If you and your spouse, the other joint tenant, or your beneficiary could die at the same time or that person could die before you. A will would enable you to name alternate beneficiaries for these circumstances.
A power of attorney authorizes another person, called an agent, to act for you in financial matters. You need to choose a person in whom you have absolute trust. The agent’s rights to act on your behalf depend on what is stated in your durable power of attorney document. These rights can include:
• Authority to sign legal documents
• Pay bills
• Buy and sell real estate
• Take other actions on your behalf
A power of attorney will end at your death. Your agent will retain no further authority to handle your finances. If you would like your agent to settle your financial affairs after you die, you would need to name that person as your personal representative in your will.
A power of attorney for health care will give your agent the authority to make health-care decisions for you when you’re unable to make them yourself. This can be a heavy responsibility for anyone to assume. You need to make sure you discuss your health-care preferences with your agent so that he or she knows what you want. This can ensure that the agent’s job is less difficult during what may already be a stressful time.
Your durable power of attorney must meet specific requirements for it to be valid.
Yes, you can have one person serve as agent for both finances and health-care. If you feel that you need to name two different agents, you need to be sure they can work together and communicate well. This would avoid a situation, for instance, where your agent for finances interferes with health-care decisions by refusing to pay certain medical bills.