An estate plan should be established to ensure your loved ones are taken care of in the event of your passing. While making the first step may seem scary and overwhelming, just know that the Pearson Butler team is here to help you. To better ease you into estate planning, here are some terms you should get familiar with before speaking with an attorney.
A beneficiary is a person or party legally entitled to receive benefits through a trust, will, or life insurance policy. A beneficiary, and even backups, are needed as it provides direction to where your estate is going.
A decedent refers to someone who has passed away. The word decedent is used in legal terms and usually refers to the owner of a life insurance policy, trust, or will.
3. Durable Power of Attorney
A Durable Power of Attorney is essential as they can make decisions on your behalf if you become unable to make critical decisions. You can have separate medical and financial POAs.
Intestate is a term used when a person passes without any form of estate planning. This is not a term you want to get familiar with, unfortunately. If you or a loved one die intestate, courts will use state succession laws to decide who gets the benefits from your estate. Creating an estate plan can help your loved ones in the long end.
A trust is a legal document that involves three elements: a trustor, a trustee, and a beneficiary or beneficiaries. The trustor creates the trust, which gives the trustee authority to manage property for a beneficiary. Despite popular belief, trusts aren’t only for the wealthy. This document is your key to avoiding probate and keeping your assets out of the hands of the wrong people.
We briefly went over trustees, but they are the person who is responsible for managing assets stated in the trust. They invest trust assets and distribute the trust income to beneficiaries as said so in the trust document.
We know this sounds similar to a trust, but it’s not. A will is a legal document that directs how you want your property to be distributed in the event of your passing. This document also allows you to specify your final wishes, arrangements, and the guardian of your children.
This can sound scary, but it doesn’t have to be with proper guidance. Planning your estate is one of the most responsible decisions you can make for your family and loved ones. If you’re looking to head in this direction, give the Pearson Butler team a call today. We would love to assist you with any questions or concerns you may have.