Creating a well-rounded plan that will take care of Delaware residents during life and their families after death can seem like a daunting task. Estate planning provides numerous options, depending on an individual’s wishes and needs. Fortunately, some basic documents can help in this endeavor.
The first is a pour-over will. A will is the basic document that expresses a Delaware resident’s wishes for the disposition of property after death. A pour-over will makes his or her trust the beneficiary, which ensures that any assets not placed in the trust during life will be moved into it. Once the assets are in the trust, they can be distributed in accordance with its provisions.
The most often used trust is called a living trust, which is often made revocable. A revocable living trust allows the grantor (its creator) to make changes to the trust during his or her lifetime. The grantor can also be the beneficiary and trustee of the trust until death, at which time it becomes irrevocable. A successor trustee appointed by the grantor then takes over, and the beneficiaries receive distributions from it in accordance with the terms of the trust.
Some assets such as retirement accounts and life insurance policies are governed by beneficiary designations that override any provisions in a will. It is vital that these designations be kept current to ensure that the right person receives the proceeds of a particular account. Finally, powers of attorney for health care and finances can designate someone to make decisions on an individual’s behalf should he or she become incapacitated. When coupled with a living will or other advanced directives, the health care agent will have a guide regarding what end-of-life measures the individual would prefer.
Once all these documents are drafted and executed, additional steps are still required. The individual’s assets will need to be transferred into the trust, and all of the documents need to be reviewed periodically to be sure that they still meet an individual’s needs and desires. Estate planning is a necessity for every adult, and if done properly from the beginning, the plan will serve an individual well and will only need modifications and changes when necessary.
Source: nerdwallet.com, “5 Key Items for Your Estate Plan“, Heather Castle, Oct. 27, 2016