For the average person, the hardest part of creating an estate plan for the first time is simply getting started. If you are unfamiliar with estate planning, you don’t know where to start nor which documents you need in your plan. Every estate plan should be tailored to the needs of the person creating the plan; however, there are some common documents found on most basic estate plans. To give you some idea of the documents you may wish to include in your initial estate plan, the estate planning lawyers at Nash, Nash, Bean & Ford, LLP explain several common documents.
Last Will and Testament
Typically, a Last Will and Testament serves as the foundation of a basic estate plan. Executing a Will ensures that you will not leave behind an intestate estate. Dying intestate means the state decides what happens to your estate assets using the state intestate succession laws. Instead, your Will allows you to make specific and/or general gifts to loved ones. In addition, your Will lets you appoint someone as the Executor of your estate. The Executor is responsible for overseeing the administration of your estate. Finally, your Will offers you the only opportunity you have to officially nominate a Guardian for your minor child should one ever be needed.
Trusts have evolved over the years to the point where a trust is now commonly found in the average estate plan. A trust is a relationship where property is held by one party for the benefit of another party. A trust is created by the owner, also called a “Settlor”, “Trustor” or “Grantor” who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories, testamentary and living trusts. A testamentary trust does not activate until after the death of the Settlor whereas a living trust takes effect as soon as all the trust agreement is in place and the trust is funded. A living trust can be further divided into revocable and irrevocable living trusts. A trust can help achieve a wide variety of estate planning goals and can even serve as the foundation of you estate plan if probate avoidance is desirable.
Power of Attorney
A Power of Attorney (POA) is an extremely common estate planning document. At some point in your life you will likely be a Principal or an Agent in a POA. A POA allows you to appoint someone as your Agent to act on your behalf in legal transactions. There are two types of power of attorney, general and limited. A general power of attorney (POA) gives your Agent almost unfettered authority to act on your behalf, meaning your Agent can engage in financial transactions on your behalf, enter into contracts in your name, and sell your assets. A limited POA, on the other hand, only gives your Agent the specific authority indicated in the POA agreement. If you make any POA durable it means that your Agent’s authority will survive your incapacity. If you make any POA durable it means that the authority you grant to your Agent will survive your incapacity.
No matter how young you are, you should consider including an advance directive in your initial estate plan because you simply never know when incapacity might strike. An advance directive helps you plan for that possibility. The State of Illinois recognizes two types of advance directives, including:
- Illinois Statutory Short Form Power of Attorney for Health Care – allows you to name someone as your Agent to make decisions about your medical care if you can no longer speak for yourself. The form lets you set down your wishes regarding organ donation, life-sustaining treatment, burial arrangements, and other advance-planning issues to help your agent make these decisions.
- Illinois Living Will — allows you to direct that, if you are suffering from a terminal condition death delaying procedures will not be continued to prolong your life.
Contact Estate Planning Lawyers
For additional information, please join us for an upcoming FREE seminar. If you are ready to get started on your estate plan, contact the experienced estate planning lawyers at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
Latest posts by Curt Ford, Partner (see all)
- What Is the Best Way to Make Changes to My Living Trust? - August 13, 2019
- What Documents Do I Need to Start an Estate Plan? - August 6, 2019
- What Happens If My Estate Lacks Sufficient Liquid Assets to Pay Debts? - June 18, 2019