There is a common misconception amongst lower- and middle-class families that estate planning is only for the wealthy. They assume if they do not have many assets—if any—to give to loved ones, there is no point in having a will in place. However, this is not the case. Everyone should draft an estate plan, regardless of their financial or family situation. There are multiple documents that should be included in an estate plan in order to remove a family’s stress in navigating life after a person’s death.
A Last Will and Testament
A last will and testament, or a will, is the most important estate planning document a person can have. A will explains how assets should be handled after a person passes away. The will should also state who should be given the assets—these individuals are called beneficiaries. If all assets are not being left to the same person, the document should clearly state who is receiving what assets and property. Additionally, the will should name an individual to administer the estate; this person is called the executor of the will. If the drafter of the will has any minor children, it is also important to name a guardian for their children. This limits the potential for disputes, where family is fighting over who is the legal guardian of the child.
Many people do not know that besides having a will, they should have a separate document for their beneficiary designations for each account they hold. A beneficiary designation specifically lists who should be given the funds from retirement accounts and life insurance policies when they pass away. Because there are specific laws that govern the taxing of retirement accounts and life insurance policies—like the SECURE Act—it is important to have beneficiary designation documents in place.
Durable Power of Attorney
Besides documents that can assist loved ones after a person’s death, there are also estate planning documents that are utilized if a person becomes suddenly incapacitated. One of these documents is called a durable power of attorney. A durable power of attorney allows a person to make financial and legal decisions on behalf of another in case they ever become incapacitated. While having this document may seem trivial, it can avoid forcing loved ones to go to court and argue in front of a judge that they should serve as the power of attorney—especially when an immediate decision must be made.
While there are some estate planning documents everyone should have, the contents of the documents themselves will depend on the individual and their needs; therefore, it is very important to speak with an estate planning attorney who can help create the estate plan.
Contact a Houston Estate Planning Attorney
If you do not have any of the above estate planning documents in place, contact the attorneys at McCulloch & Miller, PLLC. Our knowledgeable estate planning lawyers have decades of experience drafting these documents—and more—ensuring every plan matches the unique situational needs of the client. Estate planning is for everyone, so let us help you. To schedule a no-risk consultation, give us a call today at 713-333-8900.